The latest inflation figures suggest a potential 2.7 percent cost-of-living adjustment for Social Security recipients in 2026, based on updated estimates published on August 12. This projection follows the release of July data from the Consumer Price Index, which serves as the first input in the Social Security Administration’s official COLA formula.
According to a report from Marca, this early estimate remains subject to change, pending additional monthly data. While the COLA mechanism is designed to reflect broad economic trends, the final adjustment will not be confirmed until inflation results for August and September are also taken into account.
Updated Projections Show Slight Upward Revision
Independent analyst Mary Johnson and the nonpartisan group the Senior Citizens League now both project a 2.7 percent COLA, up slightly from the League’s July forecast of 2.6 percent. As a reminder, the COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a subset of inflation data that reflects price changes over a three-month window — July, August, and September.
The CPI-W rose 2.5 percent year-over-year in July 2025, while the broader CPI-U climbed 2.7 percent, before seasonal adjustment, according to the Bureau of Labor Statistics.
How the Cola Works and What It Means for Beneficiaries
If the current projection holds, the average monthly Social Security benefit, which was 1,863.12 dollars in July 2025, would rise by 50.30 dollars, resulting in a new payment of approximately 1,913.42 dollars starting in January 2026.
This follows a 2.5 percent COLA implemented in 2025 and aligns closely with the historical average increase of 2.6 percent over the past two decades. The official COLA for 2026 will be announced in October, once the full third-quarter data is available.
Inflation Pressures Still Felt by Older Americans
While inflation has moderated compared to the pandemic era, experts note that many seniors continue to experience elevated living costs. According to Mary Johnson, prices on the items that older Americans use the most remain elevated, specifically in housing, medical care, transportation, and groceries — which together account for over 85 percent of spending for people aged 62 and older.
Senior Citizens League Executive Director Shannon Benton said:
With the COLA announcement around the corner, seniors across America are holding their breath. While a higher COLA would be welcome because their monthly benefits will increase, many will be disappointed. TSCL’s research shows that many seniors believe the COLA does not adequately capture the inflation they experience.
These concerns stem in part from how the CPI-W, used by Social Security, often underrepresents expenses specific to retirees.
New Tariffs May Influence Upcoming Inflation Data
Analysts are also watching the impact of recent tariff policies, which, while only modestly affecting the July inflation figures, have shown measurable effects in categories like household furnishings and supplies. If inflation ticks higher in August or September as a result, the final COLA for 2026 could shift.
Legal Ruling Allows Controversial Data Access
In a separate development, the Fourth U.S. Circuit Court of Appeals, in a 2-to-1 decision, allowed the Trump Administration’s Department of Government Efficiency to maintain access to sensitive federal databases, including Social Security numbers and citizenship status. The court overturned a lower court’s injunction requested by unions and veterans’ organizations, stating they lacked standing and were unlikely to prove privacy violations.
DOGE, initially led by Elon Musk, has overseen broad federal job cuts and budget reductions across multiple agencies.
The final adjustment to Social Security benefits for 2026 will depend on inflation data for August and September. While the projected 2.7 percent COLA is modest, it reflects a shift toward more stable economic conditions. Yet for many older Americans, the increase may still fall short of meeting their actual cost burdens.
