New 2026 Social Security COLA Forecast Could Spell Trouble For Retirees' Benefits

It can be hard enough to age gracefully, but the current state of social security might make growing older a real pain. With the price of eggs skyrocketing and the budgetary impact of new tariffs looming, and President Trump's right hand, tech billionaire Elon Musk, falsely accusing Social Security of gross fraudulence, the cost of living continues to come with some sticker shock.

However, retirees who count on social security benefits for all or part of their fixed income know how hard it is to make each dollar count, especially after years of already-insufficient cost of living adjustment (COLA) rates to keep up with inflation. Unfortunately, the hits to Social Security keep on coming, and a freshly forecasted 2026 COLA might stretch retirees and their inadequate benefit dollars to their breaking point.

On February 12, 2025, The Senior Citizens League (one of the nation's leading nonprofit, nonpartisan seniors' rights advocacy groups) updated its 2026 COLA prediction. TSCL makes monthly predictions of the next year's COLA using a statistical model driven by data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the Federal Reserve interest rate, the national unemployment rate, and other economic conditions. This month's TSCL prediction claims the 2026 COLA will be 2.3%, up from the TSCL January prediction of 2.1%, and down from the 2025 COLA of 2.5%. While a decreased COLA tends to mean decreased inflation, the predicted COLA also falls below the 3.0% yearly rise in inflation, reported in the seasonal adjustment to the CPI on February 12, 2025, by the U.S. Bureau of Labor Statistics.

The bad news projected with the 2026 COLA prediction from TSCL is twofold. Primarily and perhaps most pressing: a 2.3% COLA is sure to fall short of inflation, just like the 2025 COLA did only a month or so into 2025. Less immediately pressing but still alarming: higher COLA increases, even by fractional percentage points, might mean more spending power for beneficiaries. However, the higher the COLA, the quicker the depletion of the Social Security Trust Fund used to pay those benefits. In this case, that fund is the Old-Age and Survivors Insurance (OASI) Trust Fund.

As of now, the truth about the future of Social Security means a trust fund depletion date of 2035. Unless Congress can get its act together on Social Security solvency before that cutoff, all Social Security beneficiaries could face a benefit reduction of 17%. But that's putting the scarier cart before the just plain-scary horse. A lot has happened to Social Security since the 2025 COLA was announced, and one main takeaway is that no COLA in recent memory has truly stood up to real-time inflation as most seniors experience it.

The Social Security Administration (SSA) determines its yearly COLA expressly to account for inflation, and draws from CPI-W data to do so. This has two major drawbacks when it comes to keeping retirement benefits' buying power strong. One: COLA calculations do not account for inflationary events like war, disease, climate crises, or shifts in economic policy. Two: COLA calculations are currently based on the spending patterns of younger to middle-aged members of the workforce, not seniors, who spend considerably more on housing and medical care.

While the SSA calculates its COLA every year, retirement beneficiaries feel the cumulative effects of inflation over many years. Even if Social Security's buying power seems strong on paper, that might not be the case in real life. In fact, Social Security's buying power has decreased in 2024, 2025, and is on track to do the same in 2026. So what is there for a senior (and their advocates) to do, aside from re-planning a budget that already seems too meager?

At the bare minimum, beneficiaries can work to protect their Social Security benefits entirely by reaching out to their state representatives and senators to let them know how important the matter is to their constituents. Phone, email, and even fax machines can be good ways to contact those reps to keep them in favor of keeping Social Security funded, and intact.

Seniors can also talk with a financial advisor about putting some of their savings in high-yield savings accounts or money market funds. This may not be an option for lower-income retirees who will be most affected by weakened COLAs. Still, any retiree looking to save doesn't need to cut out everything but survival expenses. Save money (and sanity) by partnering up with friends, family, and neighbors to split the cost of groceries, gas, and other goods and services. There may be ways to save you haven't thought of yet, and friends to make while fighting against inflation in your own way.