A new Nationwide Retirement Institute survey lands on a fear most retirees can already feel: 66% of current Social Security recipients and 69% of those expecting future benefits believe tariffs will push inflation beyond what the annual cost-of-living adjustment can cover. The worry is not theoretical, and the federal data validates it.
The anxiety is rational for reasons that go beyond headline numbers. The cost-of-living adjustment is set once a year using a backward-looking formula. Tariff-driven price moves appear in real time and concentrate in the categories retirees buy most: housing, healthcare, and food. A benefit calibrated to last year’s data cannot keep up with a rising monthly price level, regardless of what Washington decides.
Why the COLA Math Is Losing
The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose from 2.3% year over year in March 2025 to 3.5% in March 2026. That is a 1.2 percentage-point acceleration over 12 months, and it arrived largely through energy and goods costs that a single annual COLA adjustment was never designed to track in real time. The Consumer Price Index tells the same story from a different angle, moving from an index level of 319.799 in March 2025 to 330.213 in March 2026, a 10.4-point climb that has now reaccelerated after a period of relative calm.
The structure of the cost-of-living adjustment compounds the problem. It is calculated using the CPI-W, which tracks urban wage-earner spending and does not fully capture the healthcare and housing costs that dominate retiree budgets. When prices outpace the adjustment mechanism, the check quietly loses purchasing power, one month at a time.
The Financial Cushion Is Thinner Than People Think
The survey asked a sharper question than just what retirees expect from inflation. It asked whether they could absorb a disruption to benefits. Sixty-one percent of current recipients and 54% of those expecting benefits said they could not financially survive missing even half of one monthly Social Security payment. That is a household budget operating with no slack in an environment where average hourly earnings have climbed from $36.11 in March 2025 to $37.38 in March 2026, yet the personal savings rate has still slipped from around 6.2% in early 2024 to roughly 4% heading into 2026. Paychecks are larger, but the reserves behind them are thinner.
The squeeze on current retirees is already showing up in concrete adjustments. Among those receiving benefits, 52% have cut back on discretionary spending, and 31% have reduced spending on essentials, including groceries and medications, because rising living costs are outpacing their fixed benefits. These are not hypothetical trade-offs. They are decisions that have already been made.
Three Moves to Fight Back
The survey data points toward specific responses rather than general anxiety. Eighty percent of Americans say they want to understand how to maximize their Social Security benefits, with 40% describing themselves as very interested. More than 7 in 10 want to learn how to manage Social Security alongside other income sources. That appetite for better outcomes is real, and the rate environment offers some specific tools to act on it.
- Delay claiming where possible. Each year of delayed retirement credits past full retirement age adds roughly 8% to the monthly benefit until age 70, a guaranteed step-up that no cost-of-living adjustment can match in isolation. The timing decision is the highest-leverage move in the entire Social Security equation, and only 21% of Americans currently know their full retirement age.
- Lock in real yields while they exist. The 10-year Treasury currently yields in the mid-4% range, and Treasury Inflation-Protected Securities, I bonds, and laddered certificates of deposit allow retirees to capture inflation-linked or near-inflation yields without stretching for risk. A laddered approach also frees cash on a predictable schedule, which helps protect against the exact missed-payment scenario 61% of recipients say they cannot absorb.
- Add income that moves with prices. Non-retirees in the survey are more than twice as likely as current recipients to consider working a second job in retirement, with 18% of those expecting benefits saying they would, versus just 7% of current recipients. Part-time work, dividend income, and other cash-flow sources can adjust with economic conditions in ways a fixed annual benefit does not.
What the Data Actually Says
Two-thirds of Americans are right to expect tariffs to outpace the cost-of-living adjustment, because the adjustment is built to lag, and the price pressure is concentrated in essentials that retirees cannot easily cut. The survey captures a population that understands the problem in broad strokes but is still early in building the specific tools to manage it. The path forward is to build income that adjusts on its own, claim benefits at the highest sustainable base, and hold enough liquidity to survive a month where the check arrives late or falls short.
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