Social Security benefits are supposed to help seniors keep up with rising living costs, but the upcoming 2026 adjustment is shaping up to be a serious letdown. As inflation creeps higher, retirees are already dealing with steeper prices—but they won’t see a bump in their Social Security checks until next year. Unfortunately, the way this adjustment is calculated could mean the increase won’t fully match the real cost of living for older Americans.
The problem goes deeper than just timing. The formula used to determine the cost-of-living increase doesn’t reflect what retirees actually spend money on. Plus, recent issues with data collection could make this year’s numbers even less accurate than usual. The result? Seniors could be stuck paying more now and receiving less later.
A Growing Gap Between Prices and Payments
Every year since 1975, Social Security benefits are adjusted for inflation through what’s known as a cost-of-living adjustment or COLA. It’s meant to ensure retirees don’t lose purchasing power as prices go up. However, the COLA for 2026 is already raising concerns.
Although the final number won’t be announced until October 2025, experts are already making projections. According to the Senior Citizens League (TSCL), a nonprofit that advocates for older Americans, the COLA could be around 2.5%—a slight increase from previous estimates. This is mainly due to inflation rising steadily in recent months, and experts believe that could continue, especially if tariffs introduced under the Trump administration push prices even higher.
Here’s the issue: while inflation is already making everyday expenses more costly for retirees, they won’t see their Social Security increase until January 2026. That means seniors are stuck paying more now, with help coming only months later.
The Metric That Misses the Mark
Another big concern is how the COLA is calculated. The government currently uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—a measure focused on the spending patterns of younger, working people in large cities.
The problem? Retirees spend money very differently. While the CPI-W assumes healthcare makes up only about 7% of a household budget, many seniors spend more than double that on medical costs alone. According to a 2024 TSCL study, this mismatch has caused retirees to lose about 20% of their buying power since 2010.
Many experts argue that the Consumer Price Index for the Elderly (CPI-E) would be a better measure because it focuses on older Americans’ actual expenses. Still, the CPI-W remains the standard—and that’s unlikely to change before the 2026 COLA is calculated.
Data Trouble Could Make Things Worse
This year, there’s one more complication. The Bureau of Labor Statistics (BLS), the agency responsible for collecting the data used in calculating the CPI-W, has been hit by a hiring freeze. That means fewer staff are available to gather accurate price information across the country.
Due to this shortage, the BLS is using less precise methods to estimate costs, which could throw off the COLA figures even more. TSCL’s Executive Director Shannon Benton warned that unreliable data could lead to seniors receiving smaller benefit increases than they deserve. Over time, this could cost retirees thousands of dollars.
No Real Winners This Time
Even though some COLA increase is better than none, retirees may still come out behind in 2026. They’re already facing higher prices, and the increase in benefits won’t arrive until months later. On top of that, the calculation is based on outdated data that doesn’t reflect what they actually spend, and this year, it may be even less accurate than usual.
All of this points to a tough year ahead for Social Security recipients. Unless something changes, 2026’s adjustment could be a painful reminder that the system doesn’t always work in favor of the people it’s meant to support.
