When the Social Security Administration (SSA) announced in October that seniors would receive a 2.5% cost-of-living adjustment (COLA), many older Americans were dissatisfied. While historically a 2.5% Social Security COLA isn’t terrible, in comparison to recent COLAs, it appears modest.
Seniors have been adjusting to their 2.5% COLA for a few months now, looking ahead to 2026 with hopes for better news on the COLA front. However, recent estimates from the nonpartisan Senior Citizens League suggest a 2.3% increase in Social Security benefits for 2026 based on current inflation data.
Though this projection may disappoint those already unhappy with the 2.5% raise, it’s important to note that it’s not definitive. Factors like inflation trends could lead to a more substantial COLA for 2026.
The Federal Reserve’s efforts to combat inflation have led to interest rate adjustments, but with inflation persisting, there’s a possibility it could rise again in 2025, setting the stage for a larger 2026 Social Security COLA. However, larger COLAs may not always benefit seniors, as they usually align with periods of high inflation.
Seniors should prepare for potential scenarios of either a smaller COLA or increased inflation leading to a larger one in 2026. Those on tight budgets may want to consider supplemental income opportunities, as working while collecting Social Security is allowed, with some restrictions based on income thresholds before reaching full retirement age.
The official announcement of the 2026 Social Security COLA will come in October, calculated based on third-quarter inflation data. Seniors should be proactive in planning for either scenario, whether adjusting to a smaller COLA or navigating potential impacts of rising inflation on their benefits.
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