Social Security COLA could rise to 2.7% in 2026

The cost-of-living adjustment (COLA) for Social Security benefits could rise to 2.7% in 2026, up from this year’s 2.5%, according to estimates from The Senior Citizens League (TSCL).

The COLA is based on the average Consumer Price Index for urban wage earners and clerical workers (CPI-W) for July, August and September, compared with the same period a year earlier. In July, the CPI-W rose 2.5% year over year, down slightly from 2.6% growth in June. The official COLA for 2026 will be announced in October.

“With the COLA announcement around the corner, seniors across America are holding their breath,” said Shannon Benton, executive director at TSCL. “While a higher COLA would be welcome because monthly benefits will increase, many will be disappointed.”

TSCL’s estimate matches July’s broader CPI reading which, according to the U.S. Bureau of Labor Statistics, climbed 2.7% annually and 0.2% monthly.

The inflation data shows early signs of higher tariffs filtering into prices for consumer goods — particularly in import-heavy categories such as car tires and furniture — but not enough to alter the broader trend. Most market participants still expect the Federal Reserve to cut interest rates in September. 

According to Benton, TSCL’s research shows that “many seniors believe the COLA does not adequately capture the inflation they experience.” 

A further challenge looms as the Social Security Administration (SSA) is expected to begin upholding a policy requiring repayment of 50% of benefits for recipients who were overpaid.

Between 2020 and 2023, $13.6 billion in benefits were overpaid, according to a February 2025 report from the SSA’s Office of the Inspector General. Overpayments often occur when beneficiaries fail to report changes — such as increased earnings, changes in medical condition or additional income — that would have reduced their benefits.