Early estimates indicate that Social Security recipients could receive a 2.7% cost-of-living adjustment (COLA) in 2026, slightly above the 2.5% increase beneficiaries saw in 2025. This anticipated bump comes amid evolving inflation trends and tariff-related price pressures that may influence the final number.

How Social Security Calculates the COLA

The official COLA is determined by measuring inflation through the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter—specifically July, August, and September—and comparing it to the same period a year earlier. The percentage increase in this index sets the COLA for the following year.

Recent data shows the CPI rose 2.7% over the past 12 months as of July, while the CPI-W increased 2.5% during the same timeframe. These figures form the foundation for current projections.

Expert Estimates and Historical Trends

Economic analyst Johnson projects a 2.7% COLA for 2026, closely aligned with the 2.6% estimate from the Senior Citizens League, a respected advocacy group tracking Social Security issues. Over the past two decades, the COLA has averaged approximately 2.6%, placing this forecast in line with long-term trends.

Tariffs and Inflation: A Subtle Influence

Although tariffs have so far had a modest effect on inflation data, their impact is already noticeable in specific categories like household furnishings and supplies. The coming months’ inflation reports could reflect stronger tariff-induced price changes, potentially nudging the COLA upward.

What This Means for Social Security Beneficiaries

A 2.7% increase means that a beneficiary receiving the average monthly payment of roughly $1,800 could see an additional $48.60 per month starting in 2026. This adjustment helps maintain purchasing power amid rising living costs, particularly important for seniors on fixed incomes.

However, final COLA numbers won’t be confirmed until the government releases inflation data for August and September later this year. Any unexpected inflation surges or economic shocks could further influence the adjustment.

Looking Ahead: Balancing Inflation and Benefits

With inflation dynamics remaining fluid due to factors like tariffs, supply chain challenges, and energy prices, the Social Security COLA remains a closely watched indicator for millions of Americans. Policymakers and advocates continue to monitor these trends to ensure benefits keep pace with real-world living expenses.