Social Security beneficiaries may receive a modest boost to their monthly payments in 2026, largely due to inflationary pressures linked to President Donald Trump’s tariff and trade policies.
These policies, which are driving up domestic prices, are expected to push the cost-of-living adjustment (COLA) higher, providing some relief for millions of Americans who rely on Social Security as a cornerstone of their financial security.
For the vast majority of retirees, Social Security is more than just an additional income stream; it is a lifeline. According to recent Gallup polls, 86% of retirees in April 2025 said their Social Security payments are essential to covering their monthly expenses.
With the COLA announcement looming each October, many beneficiaries eagerly await the news of how much more they will receive to offset inflation’s impact.
Understanding the Mechanics of COLA and Its Significance
The Social Security Administration (SSA) uses the annual COLA to ensure that beneficiaries do not lose purchasing power due to inflation. This adjustment is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the cost of a basket of goods and services typically purchased by workers and retirees.
The adjustment aims to reflect price increases, ensuring that recipients’ payments keep pace with rising costs.
In 2026, the COLA is expected to see a boost largely because of the inflationary effects of Trump’s trade policies, particularly his approach to tariffs. According to projections from the Senior Citizens League (TSCL), the cost of goods, particularly those domestically produced, is set to rise.
This increase is expected to push the 2026 COLA to approximately 2.6%, up from earlier forecasts of 2.1% in January 2025. As a result, retired workers could see their average monthly benefit increase by about $52, while workers with disabilities and survivors could receive an additional $41.
The Broader Impact of Tariffs on Inflation
The expected “Trump bump” in Social Security payments in 2026 comes at a time when the inflationary effects of tariffs are drawing increased scrutiny.
President Trump’s tariff policies, particularly on imports, have had a distinct impact on inflation by increasing domestic prices. While the policies targeted finished goods, they also affected the cost of raw materials and intermediate goods, leading to higher overall prices.
However, the benefits of the COLA increase may not fully offset the challenges retirees face. Critics point out that the CPI-W, which is used to calculate COLA, does not accurately reflect the spending habits of older Americans. Retirees typically spend more on healthcare and housing—categories that have seen higher inflation rates than the overall index.