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Social Security Beneficiaries Could See a 2.7% Bump in Their Checks Next Year
By Pete Grieve MONEY RESEARCH COLLECTIVE
July marks the first month that counts toward calculating the 2026 Social Security COLA increase.
How much of an increase will there be to Social Security benefits in 2026? Analysts are predicting a 2.7% cost-of-living adjustment, or COLA, a percentage that matches the headline rate of inflation reported Tuesday.
On Tuesday, the Bureau of Labor Statistics showed that the consumer price index, or CPI, rose 2.7% in July. That inflation rate was the same as June’s, and the reading came in slightly lower than forecasts had projected. But the rate remains above the Federal Reserve’s 2% target.
Each month, when headline CPI figures and other inflation metrics are updated by the Bureau of Labor Statistics, analysts update their projections for the next Social Security COLA increase.
People receiving Social Security benefits — in total, a group of about 70 million that includes Americans 65 and older, spouses and people with disabilities — will get a bump to their checks in January. Monthly COLA forecasts from independent analysts give beneficiaries a sense of what to expect for the following year. The Social Security Administration will make its official COLA announcement for 2026 in October.
In her latest forecast, released Tuesday, Mary Johnson, a retired Social Security and Medicare policy analyst, projects a 2.7% COLA increase, which is unchanged from last month.
Johnson explains that the consumer price index for urban wage earners and clerical workers, or CPI-W, is the specific index used to calculate the COLA. In July, this index showed an inflation rate of up 2.5%, down from 2.6% the month before.
The CPI-W reading for July — and the next two for August and September — will be the subject of extra attention due to the way the COLA is calculated based on third-quarter figures, Johnson adds.
“Data for July, August and September from the CPI-W is averaged, and then compared against the average of the third quarter a year ago. The percentage of difference is what the Social Security Administration uses to determine the annual COLA adjustment,” Johnson writes.
The numbers in Johnson’s forecast line up exactly with the prediction in a release from The Senior Citizens League, or TSCL. The nonpartisan organization is also projecting a 2.7% COLA increase for 2026, which is up by 0.2 percentage points since the start of the year.
“Inflation continues rising as the COLA announcement looms,” the TSCL said in a release on Tuesday. “The prediction from TSCL’s COLA model has consistently ticked upward. The prediction has risen each month since May, pointing to risks for resurgent inflation.”
While older Americans may be hoping for a larger COLA, that would depend on inflation ticking up in the coming weeks. While President Donald Trump’s tariffs haven’t caused a spike in inflation yet, it’s something that many retirees are worried about, given the stress that additional price increases would put on their budgets, TSCL representatives said.
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Pete Grieve is a New York-based reporter who covers personal finance news. At Money, Pete covers trending stories that affect Americans’ wallets on topics including car buying, insurance, housing, credit cards, retirement and taxes. He studied political science and photography at the University of Chicago, where he was editor-in-chief of The Chicago Maroon. Pete began his career as a professional journalist in 2019. Prior to joining Money, he was a health reporter for Spectrum News in Ohio, where he wrote digital stories and appeared on TV to provide coverage to a statewide audience. He has also written for the San Francisco Chronicle, the Chicago Sun-Times and CNN Politics. Pete received extensive journalism training through Report for America, a nonprofit organization that places reporters in newsrooms to cover underreported issues and communities, and he attended the annual Investigative Reporters and Editors conference in 2021. Pete has discussed his reporting in interviews with outlets including the Columbia Journalism Review and WBEZ (Chicago's NPR station). He’s been a panelist at the Chicago Headline Club’s FOIA Fest and he received the Institute on Political Journalism’s $2,500 Award for Excellence in Collegiate Reporting in 2017. An essay he wrote for Grey City magazine was published in a 2020 book, Remembering J. Z. Smith: A Career and its Consequence.