Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The company reaches millions of people every month through premium investing solutions, free guidance, market analysis, personal finance education, top-rated podcasts, and the non-profit The Motley Fool Foundation. One of the most anticipated announcements each year for Social Security beneficiaries is the Cost-of-Living Adjustment (COLA) reveal, as it aligns benefits with inflation to maintain purchasing power.
Recent updates to the early 2026 COLA projection have presented a mixed outlook for retirees. While independent analysts forecast different percentages for the 2026 COLA, there is a modest reacceleration in the prevailing rate of inflation. This suggests the potential for a higher-than-expected COLA next year, which could push the average retired-worker check above $2,000 for the first time.
However, despite the prospect of a higher COLA, retirees may still face challenges in maintaining purchasing power. Housing and medical care costs, which make up a significant portion of seniors’ budgets, are rising at a faster pace than the estimated COLA. This ongoing trend of losing buying power for Social Security income poses a challenge for retirees, as modest COLA adjustments may not be enough to offset the impact of rising expenses.
For retirees and those planning for retirement, staying informed about the annual COLA adjustments and understanding how inflation impacts purchasing power is crucial. As the 2026 COLA forecast unfolds, retirees will need to closely monitor their expenses and financial planning to ensure their retirement income remains sustainable in the face of rising costs.
Attribution:
This article was summarized and republished from the original source.
Please check the original article here: https://www.fool.com/retirement/2025/02/23/social-security-2026-cola-update-mixed-bag-retiree/.