Do You Understand These 3 Critical Facts About Social Security COLAs?

We're just a few months away from Social Security's 2026 cost-of-living adjustment (COLA) announcement. If you're already claiming checks, it could be the most important Social Security news you get all year because it tells you how much you can expect to get from the program in 2026 -- and how much of your expenses you'll have to cover on your own.

The only true way to know how much you'll get next year is to wait for the official COLA announcement in October. But understanding these three key COLA facts can help you get some idea of what to expect now.

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1. How the COLA calculation works

The Social Security Administration bases the COLA on the difference in average third-quarter inflation data from one year to the next, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It sounds more complicated than it is.

To calculate the 2026 COLA, it will add the CPI-W numbers for July, August, and September of 2025 and divide them by three to get the average. Then, it will compare that average to the average from the same months in 2024. The percentage increase reflects the COLA amount. So if the 2025 average is 3% higher, the 2026 COLA would be 3%.

We don't have all the data to perform the calculation yet, which is why the Social Security Administration doesn't announce the COLA until October. That's when the September 2025 CPI-W number comes in.

2. COLAs are a percentage of your checks

The Social Security Administration represents COLAs as a percentage. It adds this percentage to your existing checks to determine your 2026 benefit amount. That means everyone will see a unique dollar-value increase.

The difference can be pretty significant. Someone claiming a $2,000 monthly check would only get $50 extra dollars from a 2.5% COLA, while someone claiming a $5,000 monthly check would get $125 more per month.

3. COLAs don't actually help your checks keep up with inflation

The whole idea of COLAs is to help your Social Security checks' buying power remain steady over time. But research suggests this isn't actually happening. Benefits have lost 20% of their buying power since 2010, according to The Senior Citizens League (TSCL), a nonpartisan senior group. That means you'd need $1 to buy something you could've bought with $0.80 in 2010.

This trend doesn't show any signs of slowing down, either. TSCL's latest estimate puts the 2026 COLA at just 2.5% -- the same as 2025. However, there is a chance it could be a bit higher if inflation rises over the next few months. There's a real chance you may get less than you'd hoped for, though.

You can try several things to overcome this predicament. If you have personal savings, you can use them to supplement your Social Security checks. You could also consider working part-time or signing up for government benefits, like Supplemental Nutrition Assistance Program (SNAP) benefits and Supplemental Security Income (SSI). This can give you some help with your essential costs so you can use your Social Security checks in other areas.

It's not too early to start brainstorming how you'll want to tackle your budget in 2026. But just note that you may have to adjust your plans in October when the Social Security Administration announces the official 2026 COLA.

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