We're Getting Closer to a Social Security COLA Announcement. Here's What We Know So Far.

Key Points

• Social Security benefits are eligible for an annual cost-of-living adjustment (COLA).

• Many seniors were disappointed in 2025's raise.

• It's too soon to know what 2026's COLA will look like, but there are some initial estimate that may be helpful.

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

For people who reach retirement without much savings, Social Security can be a true lifeline. And it's people in that situation who tend to be very reliant on the program's cost-of-living adjustments (COLAs).

Social Security benefits are eligible for a COLA each year. That doesn't mean they're guaranteed to get one, though.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

If there's no rise in inflation from one year to the next, benefits don't increase. Thankfully, though, the worst thing that happens is that they stay put. Social Security benefits can't be adjusted downward, even if there's a drop in inflation year over year.

At this point, many Social Security recipients are eager to know what raise they'll be getting in 2026. And unfortunately, it's too soon to have an official answer.

Social Security COLAs are based on third-quarter inflation data. This means that until data from September comes in, a COLA can't be calculated. It's for this reason that the Social Security Administration won't be able to announce a COLA until Oct. 15.

However, based on inflation data so far, there are clues as to what year's COLA might be. Whether you're happy with the number, though, depends on how you look at things.

What we know about 2026's Social Security COLA so far

In 2025, Social Security recipients saw their benefits increase by 2.5%. And many seniors were unhappy with that small a raise.

So far, next year's COLA is potentially looking to be more promising. The Senior Citizens League, an advocacy group, is estimating that 2026's raise will come in at 2.7%.

Of course, this number could wiggle upward or downward, depending on what inflation has in store for August and September. But either way, there's a good chance seniors on Social Security will get a slightly larger raise in 2026 than they did this year.

Should you be happy with a 2.7% COLA?

That depends. On one hand, it's higher than this year's raise, and it's not nothing. There have been many COLAs in the past that were much smaller (including a number of 0% COLA years).

On the other hand, 2.7% is hardly a large boost. If you've been struggling to keep up with your living expenses, you may find that a 2.7% Social Security COLA doesn't do all that much for you.

But there's another silver lining to a 2.7% COLA, or something in that vicinity. A moderate COLA is an indication that inflation isn't rising at such a rapid pace.

There's fear that in the coming months, tariffs will drive living costs up -- not just for seniors, but Americans on a whole. If next year's COLA ends up somewhere in the ballpark of 2.7%, it will be an indication of economic stability.

Think about your lifestyle carefully if you're COLA-dependent

All told, you'll have to wait until mid-October to see what the official word is on next year's COLA. But if you're worried it won't be enough, it may be time to reassess your financial situation.

Think about the things you spend money on and the value they bring you. You may not be able to cut back on food or electricity, but you may be able to sell a nicer car and replace it with a cheaper one. Or you may be able to give up a car altogether if you live in a walkable neighborhood and no longer have a job to commute to on a daily basis.

Another thing worth considering is part-time work if you're able to do it. Not only might that give you something to do with your time, but it could also improve your finances a lot more than a Social Security COLA -- even a larger one.

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

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.