The US economy is going through a rather delicate situation due to the implementation of tariffs by Republican President Donald Trump. The administration of the Social Security works so that inflation is not a problem for retirees, but every time the task is becoming more difficult. In the United States, the cost-of-living adjustment (COLA) is calculated annually to equate the benefits received by retirees with the price of life at that time. Although the official figures will not be published until October, The Senior Citizens League has done its calculations for 2026 and is expected to be lower than 2025, becoming the lowest since 2020.
Social Security and inflation
Social Security is the US administration responsible for providing benefits and income to retired people, or those who cannot work because of disability. It is responsible for implementing various measures so that the citizen can have a decent lifestyle once he or she has finished working. Meanwhile, will be the reference point if you need to apply for some type of help or carry out any bureaucratic process. Social security also has the task of safeguarding benefits so that they do not lose purchasing power, always depending on the price of life at the time. Currently, the inflation caused by the new measures of Trump forces the administration to increase the amounts of benefits.
What exactly is inflation? It is the generalized and sustained increase in time of the price of goods and services in an economy. What does this imply? That with the same amount of money you can buy fewer goods or services, which creates a serious problem. How does this affect retirement benefits? If the price of basic necessities is increasing, they will not be able to meet the cost of living with the same budget as before the rise.
Cost of living adjustment (COLA)
How does Social Security make a fair calculation between the cost of living and the increase that must be generated in pensions? Through the COLA, Cost of living adjustment. The percentage of increase applied each year in January is announced in October of the previous year. That is, this October 2025 we will know what will be the increase for benefits in 2026.
How is this calculated? Calculated annually using the Consumer Price Index for Urban Wage Earners (CPI-W). The average CPI-W for the third quarter of the current year (July, August and September) is compared with that for the same period of the previous year. The difference between the two will determine the percentage of COLA for the following year.
The Senior Citizens League
It is one of the largest non-partisan associations in the country, whose mission is to ensure that all retirees are aware of their obligations and rights when they have stopped working. Provide support and guidance for social security-related procedures. The Senior Citizens League has already made its bets. He has dared to predict the percentage of the COLA for next year 2026, and the results are not very good. According to the association, there will be an increase in 2026 to 2.4% compared with 2.5% in 2025. Not only is it a smaller increase, but it is the lowest COLA value since 2020.
2023 was the highest COLA in forty years, with 8.7%, data that have nothing to do with the current. However, the social security system still has time to make its calculations and it will be seen whether they coincide with those of The Senior Citizens League. In addition, count on the plus of the Federal Reserve has put hands to work to reduce inflation by 2%, although everything suggests that Trump’s rates will continue to increase and will not be reduced at all.
How will my benefits be affected by COLA?
