The Social Security Administration (SSA) sends payments to retirement benefits (for active beneficiaries and surviving family members), as well as to disabled workers and other recipients with disabilities or low incomes. To ensure payments don’t lose purchasing power in the face of inflation, the agency applies a Cost of Living Adjustment (COLA) based on the CPI-W Consumer Price Index.
From January through December 2025, the COLA increase for Social Security benefits was 2.5%, a far cry from the 8.7% that applied to the more than 70 million payments in 2023, as well as the 3.2% that applied in 2024.
Projections for Social Security COLA for 2026 increased
The Senior Citizens League (TSCL) has recently pointed out problems with data collection in order to correctly compile the CPI-W index, which has left the COLA somewhat outdated or inaccurate.
The Bureau of Labor Statistics (BLS) is facing “unprecedented challenges,” according to the report. This situation could compromise the accuracy of the required index. The federal agency has reduced its geographic sample size for monitoring, impacting the compilation of the CPI-W.
On June 4, the BLS announced the suspension of collection in Buffalo, New York. It had previously halted operations in Lincoln, Nebraska, and Provo, Utah. These decisions were due to budgetary constraints. The federal hiring freeze limited operational resources.
The COLA increase could be “outfashioned”
The TSCL warned of risks in the final COLA determination. It noted that less reliable data would affect retirees. In its report, it stated: “Problems with the CPI data could spell trouble for older Americans.” Accuracy is critical for adjustments.
“If the government fails to act and data quality begins to deteriorate, the likelihood of the government providing a COLA that doesn’t match inflation increases,” the TSCL stated. It explained that errors could lead to persistent underestimates. Such cumulative errors would affect permanent revenues.
The organization emphasized that gaps erode purchasing power. “A COLA that falls below inflation would set seniors back,” it stated. Compounding benefits require annual precision. The BLS reaffirmed that it will continue to evaluate follow-up operations.
Other projections agree with 2.5% for 2026. Barron’s, MarketWatch, and BenefitsPro support this figure. Investopedia offers a more conservative estimate of 2.1%. AS.com projects 2.4%, highlighting potential pressure for retirees.
The Social Security Administration will release the official COLA in October 2025. It will use data accumulated through September. Analysts will update their forecasts monthly. Factors such as trade tariffs could influence the final figures, according to experts.
TSCL analyst Mary Johnson maintains her projection at 2.5%. She notes that new tariffs could increase the percentage. The final calculation will depend exclusively on the CPI-W. The historical series shows adjustments from 1.3% in 2021 to 8.7% in 2023.
In 2025, the maximum monthly Social Security retirement payments a person can receive depend on their age at which they begin claiming benefits: if they retire at the minimum age allowed (age 62), the maximum is $2,831/month, while if they wait until their full retirement age (age 67 for those born in 1960 or later), the cap rises to $4,018/month, and if they decide to delay retirement until age 70, the maximum payment reaches $5,108/month.