As January 2025 draws to a close, the focus shifts towards financial planning for the year ahead, particularly for those relying on fixed incomes such as Social Security. The Senior Citizens League has predicted a modest increase of approximately 2.1% for the year 2026, following a low COLA increase of 2.5% in 2025—the lowest in recent years.
The prediction is based on inflation data collected by the Bureau of Labor Statistics Consumer Price Index, the same method used by the Social Security Administration to calculate COLA. Despite the lower-than-expected increase, the league warns that slowing inflation does not necessarily mean reduced prices; rather, they will rise at a slower pace.
Many seniors, as highlighted in TSCL’s 2024 Senior Survey, express concerns about their retirement income not being sufficient to cover essentials such as groceries and medical bills. The group emphasizes the need for Congressional action to address the longstanding issue of sub-par COLAs and improve the quality of life for seniors.
Additionally, the potential impact of President Donald Trump’s plan to eliminate taxes on Social Security benefits is discussed, with the suggestion that it could save seniors up to $3,000 annually—an amount significant in the context of a typical senior budget. The league emphasizes the importance of adjusting existing thresholds for determining tax obligations on benefits to keep pace with inflation.
In conclusion, the evolving landscape of Social Security COLA predictions for 2026 highlights the ongoing challenges faced by seniors in managing their finances and underscores the need for policy changes to ensure their financial well-being and quality of life.
Attribution:
This article was summarized and republished from the original source.
Please check the original article here: https://www.cpapracticeadvisor.com/2025/01/30/initial-social-security-cola-predictions-are-in-for-2026/155319/.