Are you a retiree? I’m sure you are wondering how much the government will increase Social Security payments for you, right? You are not alone because in the United States millions of elderly people depend on Social Security to live once they retire.
Each year these payments experience an adjustment called COLA (cost-of-living adjustment), which means that if prices increase due to inflation, the payments increase a bit for retirees too, so that they could continue buying.
However, what will happen in 2026? Will this increase be higher or it won’t be that much? Let’s learn more about this.
COLA and its role with retirees
COLA is the adjustment made every year so that Social Security payments increase according to inflation, this is when everything is more expensive from food and gasoline to medicine and rent. Everything.
For example, if you are a retiree that receives $1,000 per month and the COLA is 2%, then the next year you will receive $1,020. I know it seems like nothing, but if prices reach that 2% or more the money won’t be enough to buy much.
Small increase in 2025
In October 2024, the Social Security Administration (SSA) announced COLA for 2025 would be 2.5%, which was the lowest increase in years. Many retirees were worried because inflation was still high and their expenses wouldn’t reduce.
So, with more expensive foods, higher rents, and medicine that cost a fortune, the increase wasn’t enough to really improve retirees’ life.
What about 2026?
According to The Senior Citizens League, COLA for 2026 could reach 2.6%, which is a bit more than the previous year but it’s not a big change. The reason is that these figures depend on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures how much general prices increase. In June, this index showed a 2.6% increase, and this is why it is believed 2026 could reach that number.
The COLA official data for 2026 will be known in October 2025, when the complete figures of the third trimester are published.
This might not be a good news for retirees
If you see this 2.6% increase, you will immediately think it’s a good thing. However, there’s something you should know about: If inflation rises at the same pace, you (as a retiree) won’t really feel richer, because you will receive a bit more money but it will be worth the same or even less if everything keeps getting more expensive.
Experts explain it this way: “a higher COLA also means inflation is going up.’’ So, even though your payment increases, buying stuff won’t get any better.
Recommendations for retirees
Experts on economy have some advice for retirees who don’t rely only on COLA increases. Here are some ideas to improve your situation:
- Reviewing personal expenses: creating a budget and cutting unnecessary costs.
- Relocating to more affordable areas: moving to a place where living costs are lower can make a big difference.
- Finding extra income: part-time jobs, consulting, or gig economy opportunities like tutoring online or driving for apps.
- Taking advantage of discounts: many stores and services offer reduced prices for retirees.
Now that you know the possible increase of Social Security payments couldn’t be enough to deal with inflation impact, it’s time to do what experts say and plan everything carefully. The most important thing is that retirees understand that economic stability doesn’t depend only on Social Security, but also on a well-financed organization and taking advantage of all opportunities around you. Do you think this increase of Social Security payments for retirees is fair or not?