The estimated Social Security inflation adjustment for 2026 is creeping up.
The Senior Citizens League now projects that the Social Security cost-of-living adjustment (COLA) will be 2.7% next year.
That’s based on federal inflation data released today. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) shows the annual inflation rate was 2.5% in July.
Meanwhile, the related Consumer Price Index for All Urban Consumers (CPI-U) puts the annual inflation rate at 2.7% in July. That’s the same as it was in June but higher than it was in May (2.4%) and April (2.3%).
The Senior Citizens League’s 2.7% projection is up from its past couple of projections (2.6% and 2.5% before that), which is arguably good news.
A rising COLA is bad news in the sense that it typically reflects a rise in inflation. It’s good news, though, in that it means a bigger bump is in store for Social Security payments next year. And most retirees would take a bigger increase over a smaller one.
By law, Social Security COLAs are calculated based on inflation data from a monthly survey known as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The government will base the actual COLA for 2026 specifically on the average inflation rate per the CPI-W during the third quarter of 2025 as compared with the same period in 2024.
That means the official COLA for 2026 won’t be known until the inflation data for August and September 2025 is in.
Still, the Senior Citizens League’s projection is in the ballpark of other experts’ projections.
Indivar Dutta-Gupta, a distinguished visiting fellow with the National Academy of Social Insurance, tells AARP:
“We’re likely to see a relatively historically normal COLA, maybe in the range of 2.6 to 2.7 [percent].”
Mike Lynch, a managing director of applied insights at Hartford Funds, is more conservative, though. He tells AARP he expects a COLA that’s in the range of “low to mid” 2% and “probably in line with” the 2025 COLA, which was 2.5%.
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