Social Security checks are expected to get a 2.8% cost-of-living adjustment (COLA) in 2026, a new report says. For a retiree now getting an average of 1,952 a month,this would mean an extra 55—nice, but not life-changing. With 71 million Americans relying on these benefits, even a little extra cash is welcome.
Still, experts warn that 2.8% might not keep pace with the prices seniors actually see, like medicine and housing, and the new increase follows a 2.5% adjustment in 2025. Three years ago, in 2023, the rise was a whopping 8.7% to help seniors catch up after post-pandemic price spikes.
How COLA Calculations Work!
Social Security determines each year’s COLA using a formula that leaves many people scratching their heads. Agency officials start by looking at the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
They focus on the third quarter—August, September, and October—of this year and then compare those numbers to the same months last year. In this way, the price increase for the summer months is weighted most, which often surprises retirees if inflation patterns shift later in the year.
The latest calculation takes the average of the last three months of CPI-W figures instead of looking at the entire yearly inflation trend. Advocates say this creates a snapshot that misses the bigger picture of price hikes that pressure seniors every day.
Medicare costs are increasingly swallowing up any inflation adjustment. The current 2.8% increase in benefits may be all but erased next year, since experts expect Medicare Part B premiums to climb around 11.6%, with the monthly charge rising from 185 to206.50.
Because Medicare premiums are deducted from Social Security checks, the actual money seniors keep shrinks. A similar situation played out in 2025, when a 2.5% boost was countered by a 6% jump in premiums.
For retirees already living on a fixed budget, the tiny yearly gain is disappearing, creating a pressure many health and economic groups insist demands urgent policy action.
Critics say the entire system for tracking price increases is broken. The CPI-W index does not reflect how retirees actually spend money.
Instead of data weighted for seniors, the calculation is influenced by how working-age Americans buy goods. This means the rising costs of housing, prescription drugs, and nursing care—categories seniors spend on the most—are underrepresented in the index.
Housing bills aren’t letting up, rising 3.9%, while medical costs crept up 2.8% through the first half of 2025. Both numbers sprint ahead of the 2.4% gain in the Consumer Price Index for wag- ers, the gauge the government uses for Social Security and other benefits.
Compounding the problem, the Labor Department has been hampered by delayed hiring, forcing researchers to lean on “less precise” data techniques that the Wall Street Journal says could shade the real price increases the elderly face. Because this messy data still drives the COLA, the trouble lands on the very people the statistics are meant to assist.
What’s on the Road ahead for Seniors?!
The 2026 COLA, set in stone, won’t be official until mid-October 2025. That’s when September numbers close out the third-quarter. At the moment, folks are seeing estimates clustered around 2.8%, but that’s fluid.
It could rise, it could fall, depending on how inflation behaves over the summer and the early fall. The Senior Citizens League, which has been pushing the government to replace the existing measure with the CPI-E, a price index built on the spending habits of older Americans, is expecting a smaller 2.6% bump.
For now, financial advisors tell retirees to mentally budget for a barely bigger check, one that may still fall short of the bills piling up at home, especially housing and medical ones, the two biggest budget brackets for seniors across the United States.