Inflation's Silver Lining: The Social Security COLA Estimate for 2026 Is Up
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The latest projections for Social Security’s 2026 cost-of-living adjustment, or COLA, continue to inch upward. But retirees hoping to get a meaningful benefit boost next year may still be disappointed.
New estimates released Tuesday from both The Senior Citizens League, or TSCL, and independent Social Security and Medicare policy analyst Mary Johnson put the upcoming COLA between 2.6% and 2.7%, based on inflation data through June. That’s up slightly from last month’s estimates of 2.5% and reflects the continued pressure of inflation, tariffs and policy uncertainty heading into the fall.
A 2.7% COLA increase would take the typical Social Security benefit for retirees from about $1,950 to roughly $2,003. Still, experts warn that rising Medicare premiums and a slow-moving response to retirees’ actual costs may undermine any gains — especially for low-income beneficiaries.
“It’s not uncommon for Part B premiums to consume much or even all of the annual COLA, leaving little extra to cover other big cost increases,” Johnson wrote in a note Tuesday.
Latest COLA 2026 estimates contend with mounting pressures
COLAs are determined by inflation trends in the consumer price index for urban wage earners and clerical workers, or CPI-W, during the third quarter of each year. (That's July, August and September.) While the final adjustment won't be announced until October, projections are becoming more refined as midyear data solidifies.
On Tuesday, the Bureau of Labor Statistics reported that the CPI-W rose 2.6% from the previous June. That's higher than the 2.3% year-over-year increase reported for May. According to Johnson, the COLA could reach 2.7% if current inflation trends continue — her highest estimate so far this year.
Meanwhile, TSCL's latest model forecasts a slightly lower 2.6% COLA, marking the fifth consecutive month the group has raised its projection.
The increase is attributed in part to tariffs enacted by the Trump administration, which are beginning to show up in consumer prices. According to Johnson, the full impact of tariffs isn’t yet clear, and she pointed out that there are still three more months of inflation data to come before the COLA is announced.
Medicare Part B: the real cost threat
What’s troubling for many retirees is the rising cost of Medicare Part B, which is automatically deducted from Social Security benefits for most enrollees. According to the 2025 Medicare Trustees Report, the standard Part B premium is expected to increase from $185 to $206.50 in 2026. That’s an 11.6% jump; it would be the largest year-over-year increase since 2022.
Low-income retirees are particularly vulnerable, especially those who may lose Medicaid support under the recently enacted One Big Beautiful Bill Act.
While it fell short of fulfilling President Donald Trump's "no tax on Social Security" promise, the new legislation includes tax credits of $6,000 for single filers and $12,000 for couples over age 65, provided their incomes fall below $75,000 or $150,000, respectively. But the relief won’t reach everyone.
According to TSCL, Social Security benefits aren’t taxed for about half of seniors, so many low-income retirees may see little or no benefit from the tax break. In fact, TSCL's data shows that 13% of retirees live on less than $1,000 per month and that 39% rely on Social Security for their entire income. For these households, even modest premium hikes or rent increases can trigger financial hardship.
“The Big Beautiful Bill is a good start on providing financial relief for American seniors,” TSCL Executive Director Shannon Benton said in a recent press brief. “The next priority should be providing support for the estimated 7.3 million American seniors who are living on less than $1,000 per month, which is below the federal poverty line.”
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