How The Latest CPI Reading Just Changed the 2026 Social-Security COLA Forecast

Social Security benefits are supposed to help retirees cover their bills throughout retirement. In order for that to happen, periodic cost-of-living adjustments (COLAs) are built into the program. Although the COLAs are often described as “raises” because checks increase from one year to the next, they’re actually adjustments based on inflation designed to help retirees have enough money to maintain their lifestyle even as prices increase.

The announcement of each year’s COLA is an important time for retirees as they see how much their monthly income will increase, but it’s a long time away, as COLAs aren’t announced until October. The increase then goes into effect in January of the following year — so the 2026 COLA announcement will be made in October 2025, and the first larger checks will come in January 2026.

While we won’t have official data on the 2026 COLA for months, it’s still possible to make predictions on what next year’s increase will be, because COLAs are based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and CPI-W information is released throughout the year. Here’s how this data has affected the latest COLA estimate for next year.

What is the new COLA projection for 2026?

The Senior Citizens League is an advocacy group for older Americans that monitors CPI-W data and makes projections on the COLA based on this information.

When CPI-W data for April was released this May, the Senior Citizens League updated their projections on May 13, 2026. According to the most recent data, retirees are expected to be on track for a 2.5% COLA in 2026.  This is slightly higher than the projections in the past two months. In March, the Senior Citizens League estimated that the 2026 COLA would be 2.3%, and in February, it pegged the number at 2.2%.

Remember, the COLA is calculated by looking at how much prices have increased year-over-year on the basket of goods and services. The CPI-W data showed a 2.7% year-over-year increase in February, 2.2% in March, and 2.1% in April.

The projected increase from the Senior Citizens League would put the 2026 COLA below the benefit increases retirees have received in recent years. In fact, retirees next year would get the lowest Social Security benefits increase since 2021 if these numbers hold. That’s because inflation has cooled significantly since the pandemic, when costs surged due to the supply chain disruption and stimulus cash flooding the economy.   The impact of those factors is starting to lessen, resulting in these lower CPI numbers.

How is the 2026 COLA calculated?

The 2026 COLA announcement will be officially made in October, because that is when the data will be available to calculate it. COLAs are based on the CPI-W data from the third quarter of the year, which is July, August, and September. Once we see how prices are trending at that time, the Social Security Administration will be able to announce the official benefits bump.

The COLA formula’s reliance on CPI-W is the reason the Senior Citizens League can make a projection of future benefits. A new projection will be made in mid-June when May’s CPI data comes out, and retirees can expect even more insight starting later in the year when July’s data is released, since that will be the first month officially included in the calculation.

While it’s helpful for retirees to anticipate their COLA, the reality is that Cost of Living Adjustments are not actually keeping up with inflation, so, like in years past, the 2026 raise is likely going to leave retirees coping with a decline in buying power. That’s because the COLA is calculated based on changes to the prices of goods and services used by clerical workers and by wage earners who typically don’t spend as much on healthcare and housing as seniors (two types of spending that tend to see sharp price increases).

Retirees should consider working with a financial advisor to make sure they have a budget that works, with their  Social Security combined with a safe withdrawal strategy, so they can make their money last even if their COLAs aren’t as big as they’d prefer them to be.

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