The Senior Citizens League (TSCL), a nonpartisan seniors group, has predicted a 2.3 percent cost-of-living adjustment (COLA) for Social Security benefits in 2026. This forecast is lower than the 3.0 percent yearly change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) recently announced. The 2026 COLA prediction is important for about 68 million Americans who depend on these benefits to keep up with daily living expenses.
If TSCL’s forecast is accurate, the 2026 COLA would be 0.2 percentage points lower than the previous year’s adjustment, assuming inflation decreases throughout the year. TSCL’s updated COLA model uses several economic indicators such as the Consumer Price Index (CPI), interest rates, and the national unemployment rate. The model was adjusted in January to improve accuracy by processing data based on the federal fiscal year instead of the calendar year and relying less on past forecasts.
Mary Johnson, an independent Social Security and Medicare policy analyst, is predicting a 2.1 percent increase based on January inflation data and the average inflation rate over the last 12 months. However, she noted it’s still early and predictions could change. There are ongoing concerns about whether COLA adjustments are adequate and the financial difficulties many seniors face, especially those with lower incomes.
Predicted COLA for 2026 benefits
TSCL and other advocacy groups have emphasized the need for legislative changes to prevent Social Security payments from losing more purchasing power. Last week, Representative Thomas Massie of Kentucky reintroduced a bill to eliminate taxes on Social Security benefits.
The Senior Citizens Tax Elimination Act, if passed and implemented in 2025, could save the average senior household about $3,000 per year, according to TSCL. Shannon Benton, executive director of The Senior Citizens League, highlighted the potential impact, saying, “Eliminating taxes on Social Security benefits would provide financial relief to American seniors, many of whom are struggling with a rising cost of living.”
Mary Johnson also noted, “When inflation increases faster than one’s COLA, we lose buying power. This can compound over time, leaving seniors at risk of having to spend down savings more quickly, if they have any savings.
A large percentage of seniors may have to put unplanned costs such as medical expenses on credit cards, and at today’s rates, it can be very difficult or even impossible to pay off that kind of debt. This leaves older Americans at high risk of going without nutritious meals, or even homeless.”
Cliff Ambrose, founder and wealth manager at Apex Wealth, explained, “When inflation is high, everyday items like groceries, utilities, and healthcare become more expensive, so a larger COLA is needed to help retirees keep up with rising costs. However, when inflation slows down, prices stabilize, and retirees don’t need as large of an adjustment to maintain their purchasing power.”
The official COLA rate for 2026 will be announced in October, providing more clarity on the financial situation for Social Security recipients in the coming year.
The debate over the sufficiency of COLA adjustments will continue as policymakers and senior advocacy groups assess their potential impact.
