A "Trump Bump" Is Being Forecast Into Social Security's 2026 Cost-of-Living Adjustment (COLA) -- Here's How Much Extra You Might Get

Key Points

• No announcement bears more importance to retirees than the annual cost-of-living adjustment (COLA) reveal in October.

• Estimates for Social Security's 2026 COLA are trending higher -- and President Trump looks to be the catalyst behind this boost.

• However, retirees have a lengthy history of getting shortchanged by Social Security COLAs, and a "Trump bump" in 2026 is unlikely to change this trend.

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

For an overwhelming number of retirees, Social Security provides more than just a monthly check. It's nothing short of a foundational puzzle piece to their financial well-being.

In each of the last 24 years, Gallup has asked retirees to gauge the importance of their monthly benefits from Social Security. Consistently, 80% to 90% of respondents -- including 86% in April 2025 -- noted that their Social Security income was necessary, to some degree, to cover their expenses.

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For these individuals, nothing is more important than knowing how much they'll bring home on a monthly basis from America's leading retirement program. And no announcement bears more weight than the annual cost-of-living adjustment (COLA) reveal in October.

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

While Social Security's COLA announcement is typically straightforward, benefits are expected to be influenced by something of a "Trump bump" for 2026.

Why is Social Security's COLA so important for beneficiaries?

Before digging into the potential boost beneficiaries could receive in the upcoming year, it's important to lay the groundwork for what purpose Social Security's cost-of-living adjustment serves and how the Social Security Administration (SSA) calculates it.

Social Security's COLA is the tool the SSA uses to help beneficiaries avoid a loss of buying power due to inflation. For example, if a broad basket of goods and services regularly purchased by Social Security recipients increases in cost by 3% between 2024 and 2025, benefits would need to climb by a commensurate amount; otherwise, beneficiaries would be unable to buy as much. The cost-of-living adjustment increases benefits in an attempt to avoid a loss of buying power.

Before 1975, there was no rhyme or reason as to when COLAs were passed along. Spanning 35 years (1940-1974), only 11 COLAs were implemented via special sessions of Congress.

Beginning in 1975, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) became the inflationary tool used to calculate annual price changes. It has more than 200 separate spending categories with unique percentage weightings, which allow the CPI-W to be reported as a single figure each month. This makes for quick and concise year-over-year comparisons to determine whether prices are collectively rising (inflation) or falling (deflation).

But the most interesting quirk of all with the COLA calculation is that only CPI-W readings from the third quarter (July through September) matter. If the average CPI-W reading in the third quarter of 2025 is higher than in the comparable period of 2024, beneficiaries can expect a higher monthly payout come 2026.

A sizable uptick in the prevailing rate of inflation has led to more substantial COLAs in recent years. US Inflation Rate data by YCharts.

Forecasts suggest a "Trump bump" will boost Social Security benefits in 2026

Social Security COLAs have been all over the map since 2010. During the 2010s, beneficiaries endured three years of deflation, during which no COLA was passed along (2010, 2011, and 2016), as well as the smallest positive COLA on record (0.3% in 2017).

This was followed up by a 5.9% COLA in 2022, 8.7% in 2023 (the largest on a percentage basis in 41 years), 3.2% in 2024, and 2.5% in 2025. This sizable uptick in benefits on a year-over-year basis is reflective of a historic increase in U.S. money supply and, subsequently, the prevailing rate of inflation following the COVID-19 pandemic.

With the average COLA over the last 16 years clocking in at roughly 2.3%, beneficiaries are crossing their fingers and hoping for a fifth consecutive year with an above-average payout boost in 2026 -- and they just might get it, courtesy of President Donald Trump's tariff and trade policies.

Back in mid-January, less than a week before President Trump was inaugurated for his nonconsecutive second term, nonpartisan senior advocacy group The Senior Citizens League (TSCL) was forecasting a 2.1% cost-of-living adjustment for 2026. Meanwhile, Social Security and Medicare policy analyst Mary Johnson, who retired as a policy analyst from TSCL last year, was projecting a 2.2% COLA for 2026 as recently as mid-March.

But following the release of the June inflation report from the U.S. Bureau of Labor Statistics last week, TSCL and Johnson have increased their 2026 COLA forecasts to 2.6% and 2.7%, respectively. This increase is prominently based on the expectation of modest inflation tied to President Trump's tariff and trade policies.

For instance, Trump's tariff policy doesn't make much of a differentiation between output and input tariffs. The former are duties attached to finished products imported into the country, while input tariffs are affixed to goods used to complete the manufacture of a product in the U.S. Input tariffs have the potential to increase domestic prices and ignite inflation, which, in turn, can lift Social Security's 2026 COLA and provide a "Trump bump."

How much extra should beneficiaries expect? Based on the latest forecast from TSCL, a 2.6% COLA would boost the average monthly benefit for retired workers, which topped $2,000 for the first time ever in May, by about $52. As for workers with disabilities and survivor beneficiaries, their monthly payouts would climb by about $41 next year.

For the nearly 70 million beneficiaries currently receiving a payout from Social Security, Trump's impact on COLAs works out to approximately $9 extra per month in 2026, based on the difference in TSCL's COLA forecasts between mid-January (2.1%) and mid-July (2.6%), and Johnson's COLA projections from mid-March (2.2%) to mid-July (2.7%).

Image source: Getty Images.

Retirees regularly get the short end of the stick with Social Security COLAs

If these estimates from TSCL or Mary Johnson prove accurate, beneficiaries will enjoy their fifth straight year with an above-average cost-of-living adjustment. Nevertheless, Social Security COLAs have a lengthy track record of disappointing retirees -- and the upcoming year is unlikely to break this trend.

On one hand, switching to the CPI-W from a system that had no rhyme or reason for assigning COLAs prior to 1975 was an improvement. Conversely, the CPI-W has inherent flaws built in that continue to give retirees the short end of the stick.

As this inflationary index's full name shows, it tracks the spending habits of "urban wage earners and clerical workers." These are traditionally working-age Americans who aren't currently collecting a Social Security benefit. More importantly, they spend their money quite differently than the 87% of Social Security beneficiaries who were 62 and older in December 2023.

For instance, working-age Americans often spend more on education, apparel, and transportation than seniors. In comparison, people aged 62 and above spend a higher percentage of their monthly budget on shelter and medical care services than the typical working American. Unfortunately, the CPI-W doesn't provide added weighting to these important categories for retirees.

The big issue is that the trailing-12-month inflation rate for shelter and medical care services has pretty consistently been higher than the annual COLA retirees have received. The modest Trump bump expected in 2026 isn't going to make a dent in the loss of purchasing power that retirees have been contending with.

According to TSCL, the buying power of a Social Security dollar dropped 20% between 2010 and July 2024. Until the costs that matter most to retirees garner more weight in the inflationary index responsible for calculating Social Security's COLA or the spending categories that matter most see a significant reduction in their respective inflation rates, the purchasing power of a Social Security dollar is likely to wither.

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