Why the Social Security COLA Just Doesn’t Add Up
Today officially marks the start of 2026. For retirees receiving Social Security benefits, that means an additional $56 on average each month. That’s due to the 2.8 percent cost-of-living adjustment.
An article by Kiplinger points out that the modest cost-of-living adjustment (COLA) is a sign that inflation has become more manageable since the pandemic surge. The problem is that consumer prices have gotten out of hand. According to the article, “prices have risen nearly 25 percent overall since 2020, and household staples such as eggs and beef have more than doubled in that period.”
The loss of buying power is especially hard on seniors living off a fixed income. In one survey, 72 percent of older Americans said they would need at least a 5 percent COLA to keep up with their living expenses.
Calls for a New COLA Calculator
The biggest problem is the way the COLA is calculated. Currently, the Social Security Administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to measure how much more goods and services cost from one year to the next. But wage earners have vastly different spending habits than retirees. The CPI-W underestimates the amount seniors spend in categories where inflation tends to be very high, such as healthcare.
The Seniors Trust and other senior advocates believe the Consumer Price Index for the Elderly (CPI-E) should be used instead to calculate the COLA. This index shows how inflation actually impacts the typical retiree based on seniors’ spending habits.
We are calling on Congress to enact the Social Security Expansion Act. It calls for adopting the CPI-E as the COLA calculator, better ensuring that Social Security benefits keep pace with inflation.
Additionally, this landmark piece of legislation would also extend the solvency of the Social Security trust fund, expand Social Security benefits by about $200 a month for current and new beneficiaries, require millionaires and billionaires to pay their fair share into Social Security by lifting the wage cap, and improve the Special Minimum Benefit for Social Security recipients which would help low-income workers stay out of poverty.
Join Our Cause
Is this something you can get on board with? Join us in urging lawmakers to enact the Social Security Expansion Act. You can show your support by signing our petition.
