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By Suzanne Blake
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Social Security payments are likely to rise in 2026, according to a new cost-of-living adjustment (COLA) estimate based on today's inflation.
The latest projection for the 2026 COLA is 2.5 percent, which would enable Social Security beneficiaries to experience a modest increase in their monthly benefits.
Why It Matters
Inflation has led to increases in Social Security payments to reflect the cost-of-living changes seniors face in their everyday lives.
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In 2022, the COLA was set at 5.9 percent, and in 2023, seniors experienced an 8.7 percent increase from the COLA due to widespread inflation.
Nearly 70 million Americans receive Social Security payments each month, with a significant portion of those recipients being retirees who rely on the funds for basic living expenses.
Newsweek reached out to the Social Security Administration for comment via email.
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What To Know
Retirees can likely expect a COLA of 2.5 percent in 2026, according to a new estimate from Mary Johnson, a Social Security and Medicare policy analyst.
That would match the COLA for 2025, which was also set at 2.5 percent.
This prediction is based on the consumer price index, which rose 2.4 percent year over year in May. The CPI-Q, also known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, grew by just 2.2 percent, marking the lowest increase since 2020.
President Donald Trump's recently enforced tariffs have not yet made a major impact on inflation, but if the tariffs have a significant effect on prices, the COLA could surge higher.
"It's almost pointless to try to predict it, as it's just going to match up with the CPI-W," Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek.
"Most advisers agree that the bigger issue is the CPI-W may not be the best COLA measure for seniors, and often results in a lower COLA increase than the CPI-E, or Consumer Price Index for the Elderly, would have delivered. That small shortfall, compounded over a number of years, results in a dire situation for our oldest citizens."
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "It's still difficult to say where the COLA adjustment will land. Right now, we're seeing more modest increases in-line with last year's, but this trajectory could change if there is a pricing impact from the tariff policy being implemented. So far, though, that impact hasn't been seen on most items, and you're seeing that reflected in not a sizable uptick in this adjustment."
The Senior Citizens League previously said in a recent report: "If the government fails to act and the CPI's data quality begins to erode, it increases the likelihood of the government providing a COLA that doesn't match inflation. While there's a chance that any miss could be higher than actual inflation, it's just as likely that a miss would be low. A COLA that comes in under inflation would set seniors back for the rest of their retirement, as Social Security checks compound over time with each additional COLA."
What Happens Next
The Social Security Administration will officially announce the 2026 COLA in October. This will be based on the most recent inflation data for the third quarter.
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