As we look ahead to the 2026 Social Security cost-of-living adjustment (COLA), many retirees are hoping for a better outcome than the modest 2.5% increase seen in 2025. The calculation of the COLA is based on inflation data, specifically the difference in average third-quarter Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) figures from the current year and the previous one.
While the official COLA number for 2026 won’t be known until October 2025, organizations like The Senior Citizens League (TSCL) use statistical models to project potential increases. The latest projections suggest a possible 2.3% rise in benefits, which could bring the average monthly benefit from $1,979 to $2,025.
However, a larger COLA doesn’t always translate to increased purchasing power for retirees. Rising costs across various goods and services can often offset the benefit increase, leading to a loss of buying power over time. Some advocates have called for the use of the Consumer Price Index for the Elderly (CPI-E) instead of the CPI-W to better reflect senior spending habits and address this issue.
As discussions around Social Security reform continue, including potential changes to the COLA calculation, retirees are advised to stay informed and plan their budgets accordingly. Keeping an eye on the 2026 COLA predictions and understanding its implications can help retirees navigate their financial future with confidence.
Attribution:
This article was summarized and republished from the original source.
Please check the original article here: https://www.fool.com/retirement/2025/02/22/social-security-2026-cola-bigger-boost-expected/.