Your 2026 Social Security Raise Is Set for a "Trump Bump" -- Here's How Much Extra You Can Expect

Key Points

• Most retired Social Security recipients rely on their monthly payout to cover at least some portion of their expenses.

• President Trump's tariff policy is believed to be pushing prices modestly higher, which should have a correspondingly positive impact on Social Security's 2026 cost-of-living adjustment (COLA).

• However, inherent flaws in Social Security's inflationary measure, coupled with a stark projected increase in Medicare's Part B premium, can offset most of next year's COLA.

• The $23,760 Social Security bonus most retirees completely overlook ›

In May, the average monthly retired-worker benefit crested $2,000 for the first time in Social Security's storied history. While this is a relatively modest monthly sum, it's proven vital to helping retirees cover their expenses.

For nearly a quarter of a century, national pollster Gallup has surveyed retirees to determine how important Social Security income is to their financial well-being. Based on their responses, between 80% and 90% of retirees rely on this leading social program to make ends meet.

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With nearly 70 million people in July receiving a traditional Social Security benefit, including more than 53 million retired workers, it should come as no surprise that the annual cost-of-living adjustment (COLA) announcement from the Social Security Administration (SSA) in October is the most anticipated reveal of the year.

However, the 2026 COLA reveal should be unique, as it's a virtual certainty to be influenced by President Donald Trump's tariff and trade policy. In other words, beneficiaries can expect a "Trump bump" come January.

President Trump delivering remarks. Image source: Official White House Photo by Joyce N. Boghosian, courtesy of the National Archives.

What is Social Security's COLA and how is it calculated?

But before diving into any of the narrowed Social Security COLA forecasts, the groundwork needs to be laid of what the program's COLA is and how it's calculated on an annual basis.

The primary purpose for the cost-of-living adjustment is to combat inflationary pressures. For example, if a large basket of goods and services regularly purchased by seniors were to increase in cost by 2% from one year to the next, Social Security benefits would also need to increase by the same percentage to avoid program recipients losing buying power. Social Security's COLA is the "raise" passed along most years that attempts to account for rising prices (inflation).

In the 35 years following the very first retired-worker benefit check being mailed, COLAs were assigned with little rhyme or reason by special sessions of Congress. With no established protocol, it wasn't uncommon for years to pass without benefits being adjusted for the effects of inflation.

Beginning in 1975, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) became Social Security's annual measure of inflation. The CPI-W has more than 200 individually weighted price categories, which allows this index to be whittled down to a single figure each month to determine if prices are, collectively, climbing (inflation) or declining (deflation) from the previous year.

Although the U.S. Bureau of Labor Statistics (BLS) reports the CPI-W monthly, only third-quarter readings (July through September) are used to calculate the upcoming year's COLA for Social Security. If the average third-quarter CPI-W reading in 2025 is higher than the comparable period in 2024, beneficiaries can expect a larger benefit check come 2026.

If there is a year-over-year increase in average third-quarter CPI-W readings, the percentage difference, rounded to the nearest tenth of a percent, equals the COLA passed along to beneficiaries the following year.

A sizable uptick in the prevailing rate of inflation sent COLAs notably higher over the last four years. US Inflation Rate data by YCharts.

Nearly 70 million Social Security beneficiaries can expect a Trump bump in 2026

Ideally, beneficiaries want a sizable cost-of-living adjustment each year. While this wasn't the case throughout much of the 2010s, COLAs over the last four years have, indeed, been above average.

During the COVID-19 pandemic, fiscal stimulus increased U.S. money supply at the fastest pace in recorded history. This, in turn, led to a rapid uptick in the prevailing rate of inflation. From 2022 through 2025, Social Security COLAs clocked in at 5.9%, 8.7%, 3.2%, and 2.5%, respectively. For context, the average annual COLA since 2010 is 2.3%.

If Social Security's 2026 raise were to reach at least 2.5%, it would mark the first time this century that five consecutive COLAs have met or surpassed this mark. Based on two independent estimates, the program is on the verge of making history.

Following the release of the July inflation report from the BLS, nonpartisan senior advocacy group The Senior Citizens League (TSCL) increased its 2026 COLA forecast by a tenth of a percent to 2.7%. Meanwhile, independent Social Security and Medicare policy analyst Mary Johnson, who retired from TSCL in 2024, kept her COLA estimate unchanged from the previous month at a now-matching 2.7%.

Social Security COLA estimates for TSCL and Johnson have both risen throughout the year due to the expected modest inflationary impact of President Trump's tariff and trade policy.

On April 2, the president announced a 10% sweeping global tariff rate, as well as introduced higher "reciprocal tariffs" on dozens of countries deemed to have adverse trade imbalances with America. Though these reciprocal tariffs were paused for 90 days on April 9, and numerous trade deals have been negotiated by the Trump administration, these tariffs are believed to be pushing collective prices modestly higher.

One of the biggest concerns with Trump's tariff policy, as noted by four New York Federal Reserve economists via a study published by Liberty Street Economics, is that it fails to differentiate between output and input tariffs. An output tariff is placed on a finished product imported into the country, while an input tariff is a duty assigned to a good used to complete the manufacture of a product domestically. Input tariffs run the risk of raising prices for U.S. manufacturers.

While Social Security's COLA won't be set in stone until Oct. 15, it seems all but certain that Trump's tariff policy will have provided a boost to the final figure.

Image source: Getty Images.

Here's how much Social Security checks are forecast to climb in 2026

What would a 2.7% cost-of-living adjustment look like in dollar terms?

If TSCL and Johnson prove accurate with their respective forecasts of a 2.7% COLA in 2026, the average retired-worker beneficiary can expect their monthly payout to climb by $54 next year. Meanwhile, the average worker with disabilities and survivor beneficiary would each see their monthly checks rise by approximately $43 in 2026.

Though this probably sounds like good news, disappointment is a near certainty for most of the program's close to 70 million beneficiaries.

To begin with, retirees have been contending with a loss of purchasing power since this century began. Based on a TSCL analysis from 2010 to 2024, the buying power of Social Security income had declined by 20% for retired workers.

This precipitous loss of purchasing power is the result of the CPI-W having inherent flaws. Even though seniors aged 62 and above account for 87% of Social Security's beneficiaries, the CPI-W is tasked with tracking the spending habits of "urban wage earners and clerical workers," who are predominantly working-age Americans not currently receiving a Social Security benefit. Therefore, the CPI-W isn't properly weighting the costs that matter most to retirees, such as shelter and medical care. A 2.7% COLA isn't going to change this dynamic.

The other problem for most aged beneficiaries is that their Medicare Part B premium is going to gobble up some or all of their 2026 COLA. Part B is the outpatient services portion of Medicare, with premiums traditionally deducted from the monthly Social Security payout of retired workers.

With the Medicare Trustees Report forecasting a stark 11.5% increase in the Part B premium to $206.20 per month in 2026, it's likely that most beneficiaries will feel little impact from next year's COLA.

Trump bump or not, 2026 presents as another mixed bag for retirees.

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