A key advocacy group has released its latest forecast for the 2026 Social Security cost-of-living adjustment (COLA), projecting a 2.7% increase for beneficiaries. This estimate, provided by The Senior Citizens League (TSCL), offers an early look at the potential boost millions of retirees could see in their monthly payments next year.
If this projection holds, it would represent a slight increase over the 2.5% adjustment received in 2025. However, the figure remains a preliminary estimate, with the official announcement from the Social Security Administration (SSA) expected in October 2025.
Key Takeaways
- The Senior Citizens League (TSCL) projects a 2.7% Social Security COLA for 2026.
- This would increase the average monthly retirement benefit by approximately $54, from $2,008 to $2,062.
- The estimate is slightly above the 2.5% COLA for 2025 and the 20-year average of 2.6%.
- Concerns remain that rising healthcare costs, particularly Medicare Part B premiums, could offset much of the increase.
- The official 2026 COLA will be announced by the Social Security Administration on October 15, 2025.
A 2.7% Increase Projected for 2026
The Senior Citizens League, a nonpartisan organization that advocates for seniors, has maintained its projection for a 2.7% Social Security COLA in 2026. The group uses a statistical model that analyzes inflation trends, Federal Reserve interest rates, and employment data to formulate its estimates.
This figure has remained consistent with the organization's August projection, following a period of gradually increasing estimates earlier in the year. At the start of 2025, TSCL's model had predicted a lower adjustment of 2.1%.
What This Means for Retirees
A 2.7% COLA would translate to a tangible increase in monthly income for millions of Americans. According to TSCL's analysis, the average monthly Social Security benefit for retired workers would rise from its current level of $2,008 to approximately $2,062.
This represents a monthly increase of about $54. Over a full year, the average beneficiary would receive an additional $648 in benefits. While this provides some relief, it comes at a time when many seniors report that their expenses are rising faster than their income.
COLA by the Numbers
- Projected 2026 COLA: 2.7%
- Current Average Monthly Benefit: $2,008
- Projected Average Monthly Benefit: $2,062
- Estimated Monthly Increase: $54
- Estimated Annual Increase: $648
Putting the COLA Estimate in Historical Context
To understand the significance of a 2.7% COLA, it is helpful to compare it with adjustments from previous years. The projected figure is slightly higher than the 2.5% COLA that beneficiaries received for 2025.
It also aligns closely with the historical average. Over the past two decades, the average Social Security COLA has been 2.6%. During this period, adjustments have varied significantly, reflecting the economic conditions of the time.
For instance, beneficiaries saw a substantial 8.7% increase in 2023 due to high inflation. In contrast, there was no COLA at all in 2010 and 2011, when inflation was negligible.
The Gap Between COLA and Real-World Costs
Despite the projected increase, many seniors feel that the annual COLA does not adequately cover their rising living expenses. Shannon Benton, executive director of TSCL, highlighted this sentiment in a recent statement.
"Many seniors believe inflation is much higher than the COLA estimates," Benton stated.
TSCL research indicates that approximately 80% of seniors felt that the 2.5% COLA for 2025 was not enough to offset the higher costs they experienced throughout 2024. This discrepancy is often attributed to the method used to calculate the adjustment.
How the COLA is Calculated
The Social Security Administration determines the annual COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index measures inflation by tracking the price changes of a specific basket of goods and services. The calculation compares the average CPI-W from the third quarter (July, August, September) of the current year to the same period in the previous year.
Criticism of the CPI-W Index
A primary criticism of the CPI-W is that its spending basket does not accurately reflect the expenses of a typical retiree. The index gives significant weight to costs like transportation and fuel, which may be less relevant for seniors who drive less.
Conversely, it may underrepresent expenses that constitute a larger portion of a retiree's budget, most notably healthcare. As people age, their spending on medical services, prescription drugs, and insurance tends to increase significantly.
Rising Medicare Premiums Could Reduce Net Gains
A major factor that will impact the net benefit for most retirees is the expected increase in Medicare Part B premiums. These premiums are typically deducted directly from Social Security payments.
The Medicare trustees have projected an 11.6% increase in Part B premiums for the upcoming year. If this forecast proves accurate, the average premium would rise by $21.50 per month. This increase would directly reduce the take-home value of the COLA for the majority of beneficiaries.
For an average retiree receiving the projected $54 monthly COLA increase, nearly 40% of that amount would be immediately redirected to cover the higher Medicare premium, leaving a net gain of just over $32.
Official Announcement is Weeks Away
It is important to remember that the 2.7% figure from TSCL is an educated forecast, not the official number. The Social Security Administration will announce the final 2026 COLA on October 15, 2025.
This announcement will follow the release of September's inflation data from the U.S. Bureau of Labor Statistics. The final COLA could still change based on that last piece of data. The year-over-year CPI-W increase for August was 2.8%, slightly higher than TSCL's annual projection, suggesting the final figure could potentially be higher. Retirees across the country will be watching closely for the official announcement to plan their budgets for the year ahead.
