Social Security 2026 COLA Forecasts Have Gotten Bigger. Here's How Much Your Benefit Could Increase Next Year.

Federal funding lapsed in early October after Republicans and Democrats failed to resolve budget disputes. That forced a government shutdown that has dragged on for more than two weeks with no end in sight. The government will not reopen until Congress passes legislation to restore federal funding, either via a temporary spending measure of a full-year appropriations package.

However, the Bureau of Labor Statistics has reconvened in limited capacity to compile its September inflation report, the final data point required to determine Social Security's 2026 cost-of-living adjustment (COLA). The Social Security Administration plans to announce the official pay raise on Oct. 24 even if the government shutdown is still in effect.

Here's what retired workers should know.

Image source: Getty Images.

Forecasts for Social Security's 2026 COLA have gradually increased since President Trump's tariffs took effect

Social Security benefits receive annual cost-of-living adjustments (COLAs) to ensure their purchasing power remains constant over time. The precise COLA in any given year depends on how the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) changes in the third quarter, the three-month period that runs from July through September.

The math is relatively simple: The CPI-W reading from the third quarter of the current year is divided by the CPI-W reading from the third quarter of the prior year. The increase is rounded to the nearest tenth of a percent, and that becomes the COLA in the following year. For instance, the CPI-W increased 2.5% in the third quarter of 2024, so Social Security benefits got a 2.5% COLA in 2025.

The Senior Citizens League (TSCL), a nonpartisan advocacy organization, initially predicted a 2.1% COLA in 2026. But the group has gradually raised its forecast throughout the year and now anticipates a 2.7% COLA. Similarly, independent policy analyst Mary Johnson raised her forecast from 2.1% in February to 2.8% in September.

Why are estimates trending higher? Inflation has accelerated since President Donald Trump began imposing tariffs earlier this year. The Budget Lab at Yale estimates the average tax on U.S. imports has risen to 16.7% when accounting for consumption shifts, the highest level since 1936. And that number excludes the additional 100% tariff Trump recently threatened on Chinese imports.

The president's trade policies have already had a measurable impact on inflation. Inflation was just 2.3% in April, the lowest reading in four years. But Trump imposed a 10% baseline tariff on most countries that same month and inflation has since accelerated, hitting 2.9% in August. Many economists expect that trend to continue as companies pass along more cost increases on tariffed products.

The average retired worker can expect an additional $54 to $56 per month in Social Security benefits in 2026

Social Security's 2026 COLA will almost certainly be 2.7% or 2.8%, barring an unexpectedly low or high inflation reading in September. The Social Security Administration will announce the official figure on Oct. 24, and beneficiaries will receive COLA notices by mail in December explaining their updated benefit amounts and any deductions. Those COLA notices will also be available through the my Social Security portal.

In the meantime, we can use the latest forecasts to guess how much extra Social Security income the average recipient can expect next year. The chart below lists the average monthly benefit for retired workers and spouses in August, and it shows how those amounts would change after a COLA of 2.7% versus 2.8%.

Data source: Social Security Administration.

Retirees should take some time to review the 2026 COLA when the Social Security Administration makes its announcement on Oct. 24. The press release will also explain other changes that take effect next year, including the updated retirement earnings test amounts, which tell workers who claimed Social Security before full retirement age how much income they can earn before benefits are withheld.

The Motley Fool has a disclosure policy.