Early COLA Predictions Are That Seniors Will Continue To Struggle Next Year
To help Social Security payments keep up with inflation there is an annual cost-of-living adjustment (COLA). While the 2026 COLA will not be announced until October, early indications are that it will be lower than this year’s modest 2.5% increase. According to an article by Newsweek, if nothing changes Social Security recipients will see a 2.2% COLA in 2026.
The article explains that the Social Security Administration (SSA) calculates the annual COLA using inflation data from the third quarter (Q3), which runs July 1st through September 30th. That’s why the official COLA announcement is made each October.
To calculate the Social Security COLA, the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for Q3 is compared against the average for the same period the prior year. The percentage increase (if any) becomes the COLA for the next year.
Need for a New COLA Calculator
Many senior advocates, such as The Seniors Trust, believe the COLA calculator is broken. The reason is, that basing COLA on the CPI-W does a disservice to seniors. A better option would be to use the Consumer Price Index for Americans 62 years of age and older (CPI-E) as it more accurately reflects the costs incurred by older adults, especially related to healthcare and housing.
The Social Security Expansion Act calls for adopting the CPI-E. Not only would this provide Social Security recipients with a fairer COLA, but this landmark piece of legislation also provides across-the-board benefits boost of about $2,400 per year and long-term Social Security solvency.
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