Millions of people look forward to the start of college football each year. Others get excited about the beginning of the holiday season. If you’re a retiree, there’s another important event you likely anticipate with eagerness and perhaps a bit of apprehension.
Every year since 1975, the Social Security Administration (SSA) has announced an annual cost-of-living adjustment (COLA) for the following year. No, SSA hasn’t said yet what the 2026 COLA will be. However, a widely followed estimate for the increase was just revealed.
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The Senior Citizens League (TSCL) has operated since 1994. This nonprofit organization advocates for seniors in the U.S. TSCL raises public awareness about issues impacting seniors and lobbies on behalf of seniors. And it closely monitors what the next Social Security COLA might be.
To help with this effort, TSCL built a statistical model to estimate the COLA. This model incorporates inflation, interest rates set by the Federal Reserve, and employment data. Each month, the organization releases an updated projection for the next Social Security benefits increase.
Last week, TSCL announced that its model predicts a 2026 COLA of 2.7%. This was the same percentage the organization projected in August, following several months of increased estimates. At the beginning of 2025, TSCL predicted a COLA of 2.1%.
TSCL stated that a 2.7% COLA would raise the average monthly Social Security benefit for retirees from $2,008 to $2,062. If the organization’s estimate is right, the average annual benefit increase will be roughly $648.
How would a 2.7% COLA stack up against previous increases? Last year, Social Security beneficiaries received a 2.5% COLA. Over the last two decades, the average Social Security increase has been 2.6%. The highest COLA during that period was 8.7% in 2023. The lowest was 0% in two years — 2010 and 2011.
Unfortunately, even a slightly higher-than-average Social Security COLA won’t be enough for many retirees. TSCL executive director Shannon Benton said in the organization’s latest update, “Many seniors believe inflation is much higher than the COLA estimates.” She added that TSCL estimates that 80% of seniors felt that inflation in 2024 was significantly higher than the 2.5% Social Security benefit increase given for 2025 to offset the higher costs they incurred.
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There are good reasons to support seniors’ views on this, by the way. SSA calculates the annual COLA using an inflation metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). A key criticism of the CPI-W is that it doesn’t accurately reflect the higher prices that seniors pay, especially those related to healthcare.
Speaking of healthcare costs, the trustees of the Medicare program project that Medicare Part B premiums will jump by 11.6%. If they’re right (and their estimate was spot on last year), the average Part B premium will increase by $21.50. Because these premiums are deducted from Social Security payments for most individuals, retirees will see much less of the COLA hit their bank accounts than they might expect.
Keep in mind that TSCL’s 2.7% COLA figure is only an estimate. SSA should announce the actual number on Oct. 15, 2025, after the U.S. Bureau of Labor Statistics releases the CPI-W number for September. The annual Social Security increase is calculated based on CPI-W data from the third quarter of the current year compared to the same period in the previous year.
It’s possible that the final 2026 COLA could inch up a little. There could be a greater impact of the Trump administration’s tariffs on inflation in September than earlier in the year. Notably, the CPI-W year-over-year increase for August was 2.8% — higher than in recent months.
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New 2026 Social Security COLA Estimate Revealed — Here’s the Expected Boost for Retirees was originally published by The Motley Fool
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