Social Security COLA graphic
While the actual 2026 Social Security cost-of-living (COLA) increase for retired workers won’t be announced until October, the Senior Citizens League (TSCL), a nonpartisan seniors group, is predicting the COLA increase will be 2.3% for 2026 – a modest decrease from its 2.5% estimate in December that is based on a forecast that inflation will drop throughout the coming year, according to TSCL.
The COLA adjustment helps the 67 million Social Security beneficiaries keep up with inflation. The average Social Security check is about $1,976 a month, according to the Social Security Administration.
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If TSCL's prediction is accurate, the 2026 COLA would be 0.2 percentage points lower than Social Security’s 2025’s 2.5% adjustment. In October, the SSA will use the average rate of inflation during the third quarter to compare how prices have changed compared with the third quarter of 2024.
TSCL issues a new prediction of the next Social Security COLA monthly using its statistical model, which incorporates the Consumer Price Index (CPI), the Federal Reserve interest rate, and the national unemployment rate. The model’s predictions update every month, adjusting in response to economic conditions.
On Tuesday, Federal Reserve Chair Jerome Powell told a Senate committee that with “economy remaining strong,” he is not “in a hurry" to cut interest rates, and will wait until next quarter before cutting rates again.
In making the COLA announcement, the TSCL also voiced its approval of The Senior Citizens Tax Elimination Act, a bill reintroduced last week by Representative Thomas Massie (R-KY) that would reduce double taxation on Social Security benefits for middle-class seniors. The bill, if passed and implemented in 2025, is estimated to save the average senior household roughly $3,000 per year, per TSCL.
Related: Senators demand quick implementation of Social Security Fairness Act, in letter to SSA
"Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns …," said Rep. Massie. “My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
