Experts warn that the planned adjustment to Social Security retirement benefits in 2026 may be insufficient to keep seniors from getting poorer, despite the fact that millions of Americans’ paychecks will increase due to inflation. In the six months leading up to the Social Security Administration’s (SSA) 2026 cost-of-living adjustment (COLA) announcement, the average benefit increase for American retirees is currently projected to be close to $50. The monthly retirement check that seniors get, however, might not increase by enough to prevent them from losing their purchasing power in relation to the items they usually spend their money on, and it would seem that such a situation would not be extraordinary.
This month comes with bad news regarding the cost-of-living adjustment for American seniors
The cost-of-living adjustment, which is typically confirmed in October and goes into effect at the beginning of the following year, aims to keep Social Security pay from falling behind inflation. When the Social Security Administration announced a 2.5% COLA for this year’s Social Security benefits in October 2024, the average monthly check for American retirees increased by $49 as a result. Additionally, the 2025 adjustment raised the monthly payments to other SSA beneficiaries, including disabled workers and the surviving family members of Social Security recipients who have passed away.
Experts at The Senior Citizens League (TSCL), one of the largest retiree organizations in the United States, predict that the COLA for 2026 will be similar to this year’s. A 2.2% cost-of-living adjustment will be introduced the following fall, the TSCL forecast in March. The U.S. Bureau of Labor Statistics (BLS) calculates the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an inflation indicator that the SSA uses to determine the cost-of-living adjustment each year. It is important for Social Security beneficiaries to know that the Social Security Administration calculates the cost-of-living adjustment (COLA) by comparing the CPI-W for the third quarter of the year to the previous CPI-W for the third quarter.
A COLA is applied to represent the percentage rise between the two points in time if the indicator indicates that the cost of living has increased. The problem with American seniors, according to Sean Williams, a financial journalist for The Motley Fool, is that the CPI-W looks at the spending habits of people who are working age rather than those who are getting close to retirement. Additionally, these two societal segments typically spend their money in different ways. Furthermore, the BLS reported in March that February’s CPI-W was 2.7%. However, the committee also found that the increases in medical and housing costs over the previous 12 months were greater than that, at 3% and 4.2%, respectively.
Despite the possibility of receiving a higher monthly check from Social Security, many seniors receiving benefits could be poorer in 2026 if this trend persists until the third quarter of 2025. The Senior Citizens League (TCSL) concurs that housing, in particular, causes seniors to experience severe financial strain and that retired workers’ purchasing power has steadily declined in recent years. Indeed found that the purchasing power provided by Social Security retirement benefits has decreased by a fifth since 2010, in a report released in July 2024.
How much money will seniors receive thanks to the new cost-of-living adjustment (COLA)?
As the Social Security Administration recently stated, 52 million retired workers in the US received an average monthly Social Security payout of just over $1,980 as of February 2025. For instance, in case the Senior Citizens League estimate of a 2.2% cost-of-living adjustment is true, typical retirement checks in 2026 will increase up to $2,223, which means a $43 monthly increase.
