As millions of Americans prepare for their 2026 Social Security payments, the spotlight has shifted to the potential influence of President Donald Trump’s tariff policies. While beneficiaries may see a small increase in their monthly payouts, the boost may fall short of providing real relief amid rising healthcare costs and inflationary pressures.
The U.S. Bureau of Labor Statistics (BLS) will soon release its September inflation report, marking a crucial moment for the 70 million Social Security beneficiaries across the country. The announcement, scheduled for October 15, will determine the cost-of-living adjustment (COLA) for the upcoming year. While inflation is a significant driver behind this adjustment, President Trump’s trade policies, particularly his tariffs, are playing a pivotal role in shaping the 2026 figures.
How Tariffs Are Impacting Social Security Payouts
Social Security’s annual COLA is designed to help beneficiaries keep pace with inflation. The adjustment, calculated by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), has been a vital tool for Americans relying on these payments to cover living expenses. According to a study by the New York Federal Reserve, tariffs on imports are expected to increase the overall cost of goods, which in turn drives up inflation. This inflationary effect, even if modest, is likely to push up the COLA in 2026.
The Senior Citizens League (TSCL) has recently adjusted its 2026 COLA estimate to 2.7%, up from an earlier prediction of 2.1%. This increase is largely attributed to the inflationary effects of Trump’s trade policies, which have placed additional strain on domestic production costs. However, this modest boost in benefits, estimated to raise monthly payouts by an average of $54 for retired workers, may not be as impactful as some hope. For those with disabilities or survivor beneficiaries, the adjustment is set to be slightly lower, at about $43 per month.
Rising Medicare Costs Could Undermine Social Security Gains
Despite the potential COLA boost, Social Security recipients may not experience the full benefit due to rising healthcare costs. The Medicare Part B premium, which covers outpatient services, is expected to increase significantly in 2026. According to the 2025 Medicare Trustees Report, premiums could rise by up to 11.5%, taking the monthly premium to $206.20.
For many retirees who rely on both Social Security and Medicare, this increase in healthcare costs is a double blow. Part B premiums are often deducted directly from Social Security payments, meaning the rise in premiums could negate any gain from the COLA adjustment.
Furthermore, the purchasing power of Social Security benefits has been steadily declining over the past decade. An analysis by the Senior Citizens League found that between 2010 and 2024, the real value of benefits has dropped by 20%. This decline is due, in part, to the fact that the CPI-W, used to calculate COLA, does not fully account for the higher medical and housing costs that retirees face.
While the “Trump bump” in COLA may offer some relief, it’s clear that many beneficiaries will continue to struggle with rising living and healthcare costs.
