I'm Not Counting on Social Security COLAs to Carry Me Through Retirement. Here's What I'm Doing to Combat Inflation Instead

I'm very much looking forward to retiring one day -- and collecting Social Security benefits, after paying into the system for decades. But I'm not expecting those benefits to provide the majority of my retirement income, and I'm not counting on the nearly annual cost-of-living adjustments, or "COLAs" to fully protect me from inflation, either.

Here's a look at Social Security, its COLAs, and how you and I might plan around them.

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Meet Social Security's COLAs

One of Social Security's best features is that it increases benefits for retirees almost every year, to help keep up with inflation. Here are some recent years' COLAs:

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That 2026 figure of 2.8% was just announced recently. It means that someone collecting, say, $2,000 per month will get a $56 bump, to $2,056. Someone collecting $3,000 now will get an $84 bump, to $2,084.

The problem with Social Security COLAs

A 2.8% increase might seem OK, but retirees' overall expenses are very likely to jump by more than that amount. Consider, for example, that monthly premiums for Part B of Medicare are expected to jump 11.6% for 2026, from $185 to $206.50.

Part of the problem is that the COLAs track inflation using an inflation measure that's not ideal for the purpose. They use the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) -- which is based on changes in the average prices of household goods such as food, housing, and transportation. From its name, you can see that it's focused on costs borne by workers more than retirees.

A better measure for calculating Social Security COLAs would be the Consumer Price Index for the Elderly (CPI-E), which weights categories such as healthcare and housing more heavily.

The problem with Social Security itself

Meanwhile, there's a bigger problem afoot than just the accuracy of inflation adjustments. The surplus that Social Security ran for many years has been running out. Thanks in part to many people living longer and/or retiring earlier, more money is being paid out than is coming in, so the program's surplus is expected to run dry in a few years.

If nothing is done to strengthen the program, Social Security's trust funds' surplus will run out around 2032, which will result in benefits shrinking to about 77% of the amount due to beneficiaries. (President Donald Trump's "big, beautiful bill" has played a part in hastening the depletion.) That's a major shrinking of your benefits, and it could lead to smaller COLA increases if they're based on smaller benefit amounts.

Fortunately, there are more than a few proposed ways to fix Social Security. For example, more of our wages or all of our wages could be taxed for Social Security, instead of capping that at $176,100 (for this year). Also, the tax rate on our wages might be increased. Even a small increase could deliver a lot more money to Social Security's coffers.

What I plan to do about Social Security

So what am I, a not-yet-retired person, going to do about Social Security? Well, I'm going to try to get as much as I can out of it, by doing some things to increase my benefits.

A key move is trying to delay claiming my benefits. For most (but not all) people, the best strategy is to delay until age 70, if possible. I'm also coordinating with my spouse, in the hope of maximizing what we'll collect from Social Security.

If you don't have any idea how much you might be in line to collect from Social Security, set up a my Social Security account at the Social Security Administration (SSA) website. Then you'll be able to access estimates of your future benefits.

What I plan to do for retirement income

Since I'm not counting on Social Security for a lot of my retirement income, what's my plan? Here are my current thoughts and/or actions:

• I've been gradually shifting my portfolio's stock mix, shedding some growth stocks and adding more dividend-paying stocks. Dividends are great because they're often increased over time -- and often by more than the inflation rate. I'm invested in some individual dividend payers and also a few dividend-focused exchange-traded funds (ETFs).
• I'm contemplating buying one or more fixed annuities before retiring, in order to set up a fairly reliable income stream. By paying a little more or accepting a little less, I can add annual increases, to help me keep up with inflation.
• I'm likely going to delay retirement for a few years -- not only to boost my Social Security benefits but also so I can keep building my nest egg a little more before retiring.
• I've drafted a projected household spending budget for retirement, so that I can better plan for how much I need to save and how much I'll be able to spend.

What's your retirement plan? It's a smart move to estimate how much income you'll need in retirement and how you'll get it. Ideally, aim to set up multiple income streams for your retirement. Go ahead and expect some Social Security income, but don't expect it to be anywhere close to what you need or want.

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