If you're disappointed with Social Security's 2025 Cost of Living (COLA), you're not alone. The 2.5% increase in benefits added just $49 to the average monthly check, but many retirees have more expenses than last year. It can be very frustrating if you rely on a significant portion of your monthly income.
The eyes are already heading for Cola in 2026 and hope to bring better news. We've come a long way from knowing the actual numbers, but the latest predictions suggest that they may be greater than what experts originally anticipated. Whether it's good or bad, it depends on your perspective.
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The latest 2026 cola projection checked 0.2% up
The government calculates Social Security COLAS by examining the differences between the average third quarter inflation data (July, August and September data) from the current year and the previous year. To calculate this, we use the consumer price index for urban wage workers and administrative workers (CPI-W).
The average difference between the third quarter of 2023 and 2024 was 2.5%, which is how they won 2.5% COLA in 2025. , 2025.
Although there is no way to know the official number before that, the nonpartisan senior group, Senior Citizens League (TSCL), uses a statistical model that employs factors such as CPI-W numbers and Federal Reserve rates. We will do our best to estimate COLA. and consider the national unemployment rate. Update your forecasts monthly based on the latest data.
In January 2025, we predicted an impressive 2.1% increase. However, that February data rose by up to 2.3%. This will bring the average monthly benefit for January 2025 to $2,025 a month. While there is still time for this to change in either direction, it is worth noting that TSCL's forecast for Coke in 2025 was accurate to within 0.1% by April 2024.
Many people identify with bigger cola with bigger checks, so they think a bigger boost is a good thing. But reality is more complicated.
So does inflation when Colas is up
The CPI-W used to configure COLAS is a measure of inflation. The big difference in CPI-W figures from one month to the next indicates a significant increase in costs. So you get a bigger cola, but that extra money is often eaten up completely by the rising costs of all the food to shipping.
In a perfect world, Kora and inflation lockstep increases, and Social Security checks remain constant. But that doesn't happen in reality. TSCL has found that, despite COLAS, Social Security Checks have actually lost 20% of their purchasing power since 2010.
Many people have criticised this for the government's use of CPI-W. It's a strange choice given that CPI-W actively excludes retired households from the dataset. They are tracked by another index known as the Elderly Consumer Price Index (CPI-E).
When calculating COLAS using CPI-E instead of CPI-W, cola for the elderly has grown larger over the past 10 years. This is because advanced spending habits differ in some areas compared to those of young working adults. For example, retirees often spend more on health care, as health problems tend to increase with age.
Some of the Congress suggest that changes be made to CPI-E to help Social Security checks respond to inflation. However, so far, there has been no movement on the issue. However, it could occur as part of a widespread social security reform designed to address the program's $23 trillion funding shortage.
For now, all we can do is wait and see. As October approaches, 2026 Cola will become a more clear focus. Once you know what it is, it's time to start planning your 2026 budget.
