Every spring, millions of retirees start asking the same question:
“How much will my Social Security go up next year?”
At the heart of that question is the COLA—Cost-of-Living Adjustment—and for anyone living on a fixed income, it’s one of the most important financial updates of the year.
While the official 2026 COLA won’t be announced until October 2025, May is when financial experts begin releasing early forecasts, and when online searches about retirement income start to spike.
In this article, we’ll explore what COLA is, how it’s calculated, what the current projections say about 2026, and what steps retirees should take now to prepare.
What Is COLA and How Is It Calculated?
The Cost-of-Living Adjustment (COLA) is an annual increase in Social Security benefits, based on inflation. It helps protect retirees’ purchasing power as the cost of groceries, utilities, and other necessities rises.
The COLA is determined by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter (July–September) of one year to the same period the previous year.
The formula:
(Avg. CPI-W Q3 2025 – Avg. CPI-W Q3 2024) ÷ Q3 2024 CPI-W × 100 = COLA %
Early Predictions for the 2026 COLA
As of May 2025, inflation is trending moderately upward. Based on current data, most experts expect the 2026 COLA to land between 2.4% and 2.8%.
How it compares:
- 2025 COLA: 3.2%
- 2024 COLA: 3.2%
- 2023 COLA: 8.7% (a post-pandemic high)
- Historical average: ~2.6%
Factors influencing the 2026 COLA:
- Slowing but persistent inflation
- Food, housing, and medical costs
- Federal Reserve interest rate decisions
- Energy and gas prices
What a 2.6% COLA Increase Might Look Like
If the 2026 COLA ends up at 2.6%, here’s how it could impact your monthly Social Security benefit:
| Current Monthly Benefit | 2.6% COLA Increase | 2026 Estimated Benefit |
|---|---|---|
| $1,500 | +$39 | $1,539 |
| $2,000 | +$52 | $2,052 |
| $2,500 | +$65 | $2,565 |
Keep in mind: these are gross increases. Your net benefit may be affected by changes to Medicare premiums.
Will Medicare Part B Premiums Offset the Increase?
It’s possible. Some years, Medicare Part B premiums rise enough to cancel out much of the COLA increase.
While 2026 Medicare premiums haven’t been announced yet, early estimates suggest only a modest increase—likely less than $10 per month. That means most retirees should still see a net gain in take-home benefits.
How to Prepare Financially Now
Even before the final COLA is announced, you can take steps to prepare:
1. Revisit your monthly budget
Anticipate how even a modest COLA increase could impact your income and expenses.
2. Track inflation
Follow monthly CPI reports from the Bureau of Labor Statistics to stay informed.
3. Factor in Medicare
Be ready for changes in Part B premiums and supplement plan costs.
4. Consider tax impacts
If the COLA bumps your income above IRS thresholds, more of your Social Security may become taxable. Adjust your tax withholding if needed.
FAQs About the 2026 COLA
When will the 2026 COLA be officially announced?
Mid-October 2025, after Q3 CPI-W data is released.
Does every Social Security recipient get the same COLA percentage?
Yes. The COLA is applied uniformly across all eligible beneficiaries.
Could there be a 0% COLA?
It’s unlikely. Zero COLA years have only happened three times since 1975—and with ongoing inflation, 2026 is expected to bring at least a modest increase.
Final Thoughts: Be Proactive, Not Surprised
The 2026 COLA may not be record-breaking—but even small adjustments can add up. Start planning now so you can make the most of any increase.
Don’t wait until October. Use this time to review your budget, check on your Medicare plan, and speak with a financial advisor if needed.
Because when it comes to retirement income, being informed is just as powerful as the increase itself.