The Senior Citizens League has used December’s inflation numbers to generate its first Social Security cost-of-living adjustment estimate for 2026, projecting a 2.1% increase in benefits.
The actual 2026 COLA won’t be known until October, when the Social Security Administration will use the average rate of inflation during the third quarter to compare how prices have changed compared with the third quarter of 2024. For 2025, the COLA was set at 2.5%.
As noted by the Senior Citizens League, inflation came in at 2.8% in December 2024, representing a continued (if very slight) cooling over the course of the last year. However, inflation is down much more meaningfully compared with the highs seen in 2022, which resulted in a near-record 8.7% COLA in 2023 and an above-average COLA of 3.2% in 2024.
The average COLA over the past 20 years was 2.6%, according to the League, and the last time the COLA came in below 2% was 2021, when it was 1.3%.
“If SSA announced the 2026 COLA today, using data from October to December instead of July to September, it would come in at 2.6%,” the League’s analysis suggests.
The COLA Projection in Context
The League’s analysis emphasizes that, while slowing inflation is a good thing, it doesn’t mean prices will fall — just that they’ll rise more slowly. This leaves many seniors facing a budget shortfall.
According to data from the League’s 2024 Senior Survey, 62% of older Americans worry that their retirement income won’t cover essentials like groceries and medical bills.
“Inflation slowing down doesn’t mean that seniors are catching up,” observed Shannon Benton, executive director of the Senior Citizens League, in a statement. “It’s essential that Congress acts quickly to fix years of sub-par COLAs and help give seniors the quality of life they deserve.”
Benton called on President-elect Donald Trump to support seniors by following through on his plan to eliminate taxes on Social Security Benefits, a move that could save a typical senior about $3,000 a year.
“The Trump Administration’s plan to eliminate taxes on Social Security benefits would make a massive difference,” Benton argued. “The current thresholds used to determine if you’ll pay taxes on your benefits were set up back in the 1980s, and we’ve never adjusted them for inflation.”
Credit: ALM
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