Social Security is not meant to serve as retirees’ only or even primary source of income. But for many people, that ends up being the case.

Many current retirees missed the boat on savings. Without pensions to fall back on, they’re very reliant on Social Security to make ends meet.

Now the good news is that Social Security is eligible for an automatic cost-of-living adjustment (COLA) each year, the purpose of which is to help beneficiaries keep up with inflation. The bad news is that 2025’s COLA wasn’t much to write home about. And also, it’s already falling behind inflation.

Inflation isn’t cooling

Social Security COLAs are pegged to inflation so that the more rampant it is, the more benefits tend to rise from one year to the next. When the Social Security Administration announced a 2.5% COLA for 2025, retirees were quickly told not to worry, despite that raise not being so significant. After all, a smaller COLA was a sure sign of cooling inflation.

But inflation, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), has only picked up since 2025’s Social Security COLA was announced. The CPI-W is the precise index used to calculate COLAs in the first place.

In January, the CPI-W rose 3% on an annual basis. In February, it rose 2.7%. Both of these numbers show that inflation is clearly outpacing the 2.5% raise seniors got at the start of the year. And if inflation levels don’t drop, many retirees will no doubt be in a financial bind this year (or a worse one than they’re in already).

It’s important to have a backup plan

If you’re having a hard time making ends meet on Social Security alone, then it’s important to recognize one thing — a larger COLA isn’t going to solve your problems. Even if Social Security benefits get a larger COLA in 2026 than they did in 2025, you’re unlikely to come out ahead financially because all that COLA will likely do, at most, is match inflation.

Instead, it may be time to think about other ways to generate some retirement income. You clearly can’t go back in time to build a huge pile of savings. But you can potentially build some savings, plus buy yourself some extra wiggle room in your monthly budget, by working a few hours a week.

The good news is that you’re allowed to work while collecting Social Security. And while earning too much could put you at risk of having some benefits withheld (depending on your age), if you’re only earning a few thousand dollars a year, it shouldn’t impact your Social Security benefits in a negative way. But what a few more thousand dollars a year could do is make up for a COLA that’s falling short and give you more breathing room in your budget.

Of course, you may not love the idea of working after having retired. But remember, you don’t have to resign yourself to a traditional job. Explore the gig economy and see where it takes you. You may find that a job not only puts money in your bank account, but gives you something enjoyable to do with your days.

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