The prediction for the cost-of-living adjustment (COLA) for Social Security benefits in 2026 compared to 2025, as current data suggests.

The prediction for the cost-of-living adjustment (COLA) for Social Security benefits in 2026 compared to 2025, as current data suggests.

The Social Security Administration is set to announce the Cost-of-Living Adjustment (COLA) for 2026, with current expert estimates predicting a 2.7% increase. This is slightly higher than the 2.5% adjustment for 2025.

The COLA percentage is primarily influenced by inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter of 2025. This index takes into account the percentage increase in the average CPI-W for July, August, and September compared to the same period in the previous year.

Key factors influencing the 2026 COLA prediction include inflation trends, up-to-date consumer price data, economic conditions, and monthly inflation data variations. These factors can cause COLA forecast revisions before the official October announcement.

For seniors aiming to improve their financial situations amid potential inflation and modest COLA increases, it's crucial to budget for rising living costs, manage Medicare premiums, diversify income sources, reduce debt and expenses, and seek financial advice.

While a 2.7% COLA helps benefits keep pace with inflation, seniors should anticipate that benefit increases may not fully offset all inflation-driven cost increases. This means that seniors should plan for potential additional expenses, such as healthcare costs that often rise faster than general inflation.

Seniors may also consider downsizing or relocating to a less expensive area to cut expenses. It's important to note that a larger Social Security COLA only means that inflation is picking up, not a guarantee of financial improvement.

The Senior Citizens League, an advocacy group, makes predictions on Social Security COLAs throughout the year. Their current 2026 COLA projection is 2.6%, based on the most recent inflation data available. However, the trend of inflation has been ticking upward these past few months, and its continuation is uncertain.

The final 2026 Social Security COLA amount will be announced in October, based on third-quarter changes to the CPI-W. Now is a good time to assess spending and determine if there's room to cut expenses. If a significant boost to monthly Social Security checks is needed, it may require more than just a COLA to see a financial situation change for the better.

Considering securing additional income outside of Social Security through gig work or part-time employment could also help improve financial situations. The uncertainty of inflation trends makes it difficult to predict the size of the 2026 Social Security COLA, but staying informed and planning ahead can help seniors navigate these challenges.

1. To manage their personal-finance during retirement, seniors should consider budgeting for rising living costs, diversifying income sources, and seeking financial advice, as the 2026 COLA increase of 2.7% may not fully offset all inflation-driven cost increases.
2. Investing time in securing additional income outside of Social Security, such as gig work or part-time employment, could potentially provide a significant boost to a senior's financial situation, as inflation trends make it challenging to predict the exact amount of the 2026 Social Security COLA.

Read also: