Social Security COLA graphic
While the actual 2026 Social Security cost-of-living increase for retired workers won’t be announced until October, The Senior Citizens League is predicting a 2.4% increase for 2026, up from last month’s prediction of 2.3%.
TSCL, a nonpartisan seniors group, is predicting the modest decrease from its 2.5% estimate in December that is based on a forecast that inflation will drop throughout the coming year, according to TSCL.
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TSCL issues a new prediction of the next Social Security COLA monthly using its statistical model, which incorporates the Consumer Price Index (CPI), the Federal Reserve interest rate, and the national unemployment rate. The model’s predictions update every month, adjusting in response to economic conditions.
Jerome Powell, Chairman of the Federal Reserve, announced that the Fed will hold interest rates steady at 4.25% to 4.5%, after the Federal Open Market Committee meeting on May 7. He emphasized that the Fed is not in a hurry to lower rates, citing the current resilience of the economy.
The COLA adjustment helps the 67 million Social Security beneficiaries keep up with inflation. The average Social Security check is about $1,976 a month, according to the Social Security Administration.
The 2026 COLA is projected to be the lowest since 2021. High inflation during the COVID pandemic led to higher-than-average COLAs of 5.9% in 2022 and 8.7% in 2023. If TSCL’s prediction for 2026 holds, seniors can expect next year’s COLA to be the lowest since the 1.3% implemented in 2021.
Independent Social Security and Medicare analyst Mary Johnson also estimates the COLA for 2026 may be 2.4%. “This year will be a closer year to watch because of the tariffs,” Johnson said of her 2026 COLA estimate, which is also recalculated every month with new inflation data.
This forecast comes after President Trump signed an executive order on Monday aimed at lowering prescription drug costs. The executive order sets a 30-day deadline for drugmakers to lower the cost of prescription drugs in the U.S. to match what they charge in other countries. Otherwise, the government will limit what it is willing to pay.
The executive order, which accuses pharmaceutical companies of price-gouging Americans,“claims that by charging Americans more for drugs, drug companies subsidize other countries at our expense,” said the TSCL.
Related: Social Security’s COLA could drop in 2026, as new forecast announced
“President Trump’s executive order is a big step for Medicare’s ability to negotiate prices. American taxpayers should not be paying more than the price charged in other countries for the same drugs, especially those made by American companies,” said TSCL Executive Director Shannon Benton. “American taxpayers shouldn’t have to subsidize the rest of the world’s health care while our own seniors are struggling to get by.
“If our predictions come true and the 2026 COLA comes in at the lowest we’ve seen since 2021, seniors will face additional pressure at a time when they’re already strained financially. Our research shows that 73% of American seniors rely on Social Security for at least half their income, with 39% depending on the program for all of their income.”
The official COLA for 2026 will be announced by the Social Security Administration in October.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
