Social Security Cost-of-Living Adjustment for 2026 Projected to Be Lowest in Five Years

The Social Security cost-of-living adjustment (COLA) for 2026 is currently projected to be the lowest increase in five years, with early estimates pointing to a 2.4% rise in benefits, according to projections by policy analyst Mary Johnson and The Senior Citizens League.

This would mark a decrease from the 2.5% increase implemented in 2025 and the smallest adjustment since 2021, when beneficiaries saw a 1.3% boost. The COLA is determined by comparing third-quarter inflation data from the current year to the same period in the previous year, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Red Candy Assortment | Source: Pexels

Recent data from the Bureau of Labor Statistics show the CPI-W has increased by 2.1% over the past 12 months, while broader inflation measured by the consumer price index has dropped to 2.3%—its lowest 12-month rate since 2021.

However, Johnson noted that “this year will be a closer year to watch because of the tariffs,” which, if implemented, could drive inflation higher and impact the final COLA figure, which is recalculated monthly and announced officially by the Social Security Administration in October.

Family shopping at the grocery store | Source: Pexels

In parallel, a new executive order issued by former President Donald Trump aims to reduce prescription drug costs across Medicare, Medicaid, and commercial markets. While Johnson indicated this policy may not affect the COLA estimate, it could influence retirees' out-of-pocket costs.