A recent Gallup survey reveals growing concern among Americans about the economy, inflation, and Social Security. These worries have reached a 15-year high, showing how important these issues are to many people.
Social Security’s cost-of-living adjustment (COLA) helps retirees keep up with rising prices. The official 2026 COLA will be announced in October. Retirees hope for a significant increase, but the latest forecast offers both good and bad news.
Good News: COLA Forecast Increased to 2.5% for 2026
The Senior Citizens League (TSCL), a nonprofit focused on Medicare and Social Security, has raised its 2026 COLA forecast several times this year due to slower-than-expected inflation cooling. The monthly forecasts were:
- January: 2.1%
- February: 2.3%
- March: 2.2%
- April: 2.3%
- May: 2.4%
- June: 2.5%
This increase means Social Security benefits could rise more than initially expected. For example, the average retired worker currently receives $2,002 per month. With a 2.5% COLA, this would increase by about $50 monthly, or $600 annually, in 2026. The earlier 2.1% forecast would have meant a $42 monthly increase.
Bad News: COLA May Not Fully Cover Retirees’ Rising Costs
Inflation affects people differently depending on their spending habits. Social Security’s COLA is based on the CPI-W, which reflects the spending of working-age adults. However, retirees spend more on housing and medical care—areas where inflation is rising faster than average.
In May, overall CPI-W inflation was 2.2%, but housing costs rose 3.9%, and medical care costs increased 2.5%. Because retirees face higher inflation in these key areas, the 2.5% COLA may not be enough to cover their true cost increases.
What Retirees Should Know
While a 2.5% COLA increase is better than earlier estimates, many retirees may still feel financial pressure due to rising housing and medical expenses. It’s important for retirees to plan carefully and explore ways to maximize their Social Security benefits.
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