Millions of Americans rely on Social Security, and any change in their monthly checks matters. Now, the first 2026 cost-of-living adjustment (COLA) forecast is out, offering both hope and concern.
Social Security benefits are vital for most U.S. retirees. In February, the average monthly benefit for retired workers was $1,980.86. That money often helps cover essential costs like food, rent, and medicine.
Since 2002, Gallup has tracked how much retirees depend on Social Security. Every year, 80% to 90% of respondents say it’s either a major or minor source of income. Clearly, most could not afford to live without it.
That’s why the annual COLA announcement in October is so important. It’s how Social Security tries to keep up with inflation.
COLA adjustments are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If prices rise, benefits go up. If inflation is flat, increases are small—or skipped altogether.
For 2026, the first projections suggest a COLA of around 2.6%, according to the Senior Citizens League. That’s lower than the 3.2% increase in 2024 and the sharp 8.7% hike in 2023. Still, it’s a sign that inflation may be easing.
However, not everyone is cheering. “While 2.6% is better than nothing, it may not fully cover rising healthcare and housing costs,” said Mary Johnson, a policy analyst for the Senior Citizens League. “Retirees on fixed incomes are still feeling squeezed.”
Historically, Congress handled COLAs manually. From 1940 to 1974, only 11 increases were passed. Some decades saw no adjustments at all. But since 1975, automatic COLAs have helped retirees keep up with inflation—at least in theory.
Today, over 52 million retired workers receive benefits. For many, each dollar counts.
The official 2026 COLA will be announced in October. It will be based on third-quarter inflation data. Until then, seniors, lawmakers, and analysts will keep a close eye on price trends.
For more business updates, visit DC Brief.
