Initial Social Security COLA Predictions Are in for 2026

Payroll | January 30, 2025

Initial Social Security COLA Predictions Are in for 2026

For those living on a fixed income such as Social Security, a key part of financial planning may include keeping tabs on next year’s cost of living adjustment, and right now they’re looking pretty low.

By Dallas Gagnon
masslive.com
(TNS)

As January 2025 nears its end, some folks are already planning ahead for 2026 and keeping their finances at the forefront.

For those living on a fixed income such as Social Security, a key part of financial planning may include keeping tabs on next year’s cost of living adjustment, and right now they’re looking pretty low.

Non-partisan group The Senior Citizens League is predicting a modest increase of about 2.1% in 2026, following 2025’s increase of 2.5%—the lowest COLA increase in years.

TSCL bases its prediction on inflation data collected by the Bureau of Labor Statistics Consumer Price Index—the same method the Social Security Administration uses to calculate COLA.

In December, TCSL predicted a 2026 COLA adjustment of 2.8% for 2026.

“In other words, cooling inflation could lead to the lowest COLA since the start of the COVID-19 pandemic,” the group wrote in a statement.

“… 2025’s COLA was a meager 2.5%, down from 3.2% in 2024 and a whopping 8.7% in 2023. The last time the COLA came in below 2.0% was 2021 when it was 1.3%,” the group said.

While slowing inflation is a good thing, the league warns that it doesn’t mean prices will fall but that they will just rise more slowly.

“This leaves many seniors facing a budget shortfall,“ the league said.

Shannon Benton, TSCL executive director, said inflation slowing down does not translate to seniors catching up.

Data from TSCL’s 2024 Senior Survey shows 62% of older Americans worry their retirement income won’t even cover essentials such as groceries and medical bills.

“It’s essential that Congress acts quickly to fix years of sub-par COLAs and help give seniors the quality of life they deserve,” Benton said.

The group added if President Donald Trump follows through with his plan to eliminate taxes on Social Security benefits, it could save seniors up to $3,000 a year—about 5% of a typical senior budget.

“The Trump administration’s plan to eliminate taxes on Social Security benefits would make a massive difference,” Benton said. “The current thresholds used to determine if you’ll pay taxes on your benefits were set up back in the 1980s, and we’ve never adjusted them for inflation.”

______

©2025 Advance Local Media LLC. Visit masslive.com. Distributed by Tribune Content Agency LLC.

Thanks for reading CPA Practice Advisor!

Subscribe for free to get personalized daily content, newsletters, continuing education, podcasts, whitepapers and more…

Subscribe for free to get personalized daily content, newsletters, continuing education, podcasts, whitepapers and more...

Comments: 4

CG RainesFebruary 2 2025 at 10:45 pm

"“In other words, cooling inflation could lead to the lowest COLA since the start of the COVID-19 pandemic,” the group wrote in a statement." What planet are they living on? Have they seen the cost of eggs and poultry lately? Slowing inflation, really? What standard are they going by, I'd love to live in that world!

Michael NagyFebruary 2 2025 at 11:23 pm

No matter what percentage they put it at the cost of living is always going to be higher and out of our reach to be able to afford all the things we need even on SSI doesn't matter they will keep it to where we can't get ahead like they can with all the funds and money they make doing the things they do we were just trying to survive

Amy hendersonFebruary 6 2025 at 11:50 am

Americans need stimulus monthly checks since the pres is taxing everything from other countries the cola is going to skyrocket Americans can not afford a hamburger let alone a place to live all disabled Americans are still starving we need 25.00 an hour minimum wage and maybe we could afford a McDonald's ecoli hamburger everything's contaminated people don't go out to eat 72.00 for 5 tacos at pappasitos get the same at taco bell for 7.00

Amy hendersonFebruary 6 2025 at 11:56 am

Americans are all broke no money for rent anywhere it takes four paycheck of 25.00 an hour to afford a one bedroom house people everywhere living in their cars if they are lucky enough to buy a car which will be 3000.00 more per vehicle starting now since pres taxing we will all pay extra 5 dollars every time you sit at a red light there's another 5 bucks. Who voted for this person is as dumb as a 300.00 dollar pair of holey jeans

Leave a Reply