Social Security's 2026 Raise Is Shaping Up Smaller Than 2025

If you're retired and counting on a big cost-of-living bump next year, the early math says: don't hold your breath. The Social Security Administration hasn't announced the official 2026 COLA yet—that lands in October—but forecasters have been crunching inflation data all year, and the number keeps drifting in one direction: down. The Senior Citizens League, a nonpartisan advocacy group that tracks the estimate monthly, has pegged the 2026 COLA at roughly 2.7%. The Congressional Budget Office is in the same neighborhood at 2.6%. For context, this year's raise was 2.5%, and 2023's was a fat 8.7%. Here's the part that stings: the 2026 increase would be smaller than 2025's only if inflation cools further—which is good news for your grocery bill, but weirdly bad news for your monthly check. The COLA is tied to a specific inflation gauge called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. When prices stop climbing fast, the raise shrinks. You can't win both ways. **What this actually means in dollars** The average retired worker currently receives about $2,000 a month. A 2.7% bump adds roughly $54 to that check. A 2.6% bump adds about $52. Either way, you're looking at less than $2 a day—which, if you've priced eggs or a gallon of gas lately, feels less like a raise and more like a rounding error. And that's before Medicare gets its hands on it. Medicare Part B premiums are typically deducted straight from Social Security checks, and those premiums have been rising faster than the COLA most years. If Part B jumps by $10 or more in 2026—entirely plausible—your net increase could be closer to $40. The "raise" can quietly shrink to almost nothing. **Why the formula shortchanges seniors** Here's the structural gripe: CPI-W measures the spending habits of working-age people, not retirees. Older Americans spend a far bigger share of their income on healthcare and housing, and a smaller share on things like electronics and apparel that tend to get cheaper. Economists have argued for years that a different index—the CPI-E, designed for people 62 and older—would produce bigger, fairer raises. Legislation to make that switch has been introduced repeatedly. It has never passed. So every year, seniors get a raise calculated from a basket of goods that doesn't quite match their lives. Some years that works in their favor. Lately, it hasn't. **What you can do now** First, don't build a budget around a number that isn't official yet. The COLA is finalized in mid-October, based on third-quarter inflation data, and it can move by a few tenths of a percent before then. Second, if you're still working and claiming benefits, remember the earnings test: in 2025, you lose $1 of benefits for every $2 earned above $23,400 before full retirement age. A smaller COLA doesn't change that math. Third, look at the other levers. If you're 65 or older, Medicare Advantage and Part D plans can be switched during open enrollment each fall—premium swings between plans often dwarf the COLA itself. And if you're 62 or older with a mortgage, a reverse mortgage or a refi at today's rates may free up more monthly cash than any raise Washington sends. **Our take** A 2.6% or 2.7% COLA isn't a crisis—it's a symptom. The real problem is that the raise is built on an inflation measure that never quite fit retirees, and it gets eaten by healthcare costs before it ever hits your bank account. Until Congress switches to the CPI-E, seniors will keep getting a raise that feels like a shrug. Plan around it, not on it.