Your 2026 COLA Is On Track to Break a 30-Year Streak

Key Points

• Retirees are on track for a record-breaking COLA in 2026.

• The COLA won't be the largest in recent years, but it's part of a pattern of large benefit increases.

• If the projections hold, retirees will see the longest streak of large COLAs in decades.

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

Cost-of-Living Adjustments (COLAs) happen in most years for Social Security retirees, and with good reason. It's important for benefits to go up over time because the cost of goods and services rises. If retirees' checks remained the same for years after seniors claimed them, those benefits would buy less and less and seniors would struggle more and more.

The Cost-of-Living Adjustment for 2026 will be announced in October of this year, but there are some early projections already based on current inflation data. Those early projections show that the 2026 COLA will do something that it hasn't done for around three decades.

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The 2026 COLA will be record-breaking

According to a senior advocacy group called The Senior Citizens League, the 2026 COLA is likely to come in at 2.7%. This projection is based on trends in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W measures the cost of goods and services, and each year, third-quarter data from CPI-W is used to determine the Cost-of-Living Adjustment. If the price of goods and services has risen from year to year, retirees get a benefits increase equal to the average increase in CPI-W.

We already have the July number, and we also have information from the CPI-W data from last year and the earlier parts of this year, so the estimate from the Senior Citizens League is likely to be pretty close to spot-on -- although the COLA could end up just a bit larger or smaller depending on how inflation trends over the next two critical months.

Since the Social Security raise is likely to be in the 2.7% range, it will end up breaking a 30-year streak and doing something that Cost-of-Living Adjustments have not done for a full generation.

The 2026 COLA is a once-in-a-generation event

The 2026 COLA will break the mold this year because it caps off a very long streak of larger-than-average raises. Here's what the Cost-of-Living Adjustments have looked like for seniors over the past few years:

• 2025: 2.5%
• 2024: 3.2%
• 2023: 8.7%
• 2022: 5.9%

Now, we'll be adding to that with another likely 2.7% raise in 2026. Based on that new addition, next year's COLA will be the first time in 30 years that COLAs have been equal to or above 2.5% for five full years. The last time this occurred was in 1996, which was the last year of a 10-year period when COLAs exceeded this threshold.

At that time, the COLAs were:

• 1987: 4.2%
• 1988: 4%
• 1989: 4.7%
• 1990: 5.4%
• 1991: 3.7%
• 1992: 3%
• 1993: 2.6%
• 1994: 2.8%
• 1995: 2.6%
• 1996: 2.9%

Since 1996, there has been no other five-year period when COLAs stayed above that 2.5% threshold, although there have been individual years when Cost-of-Living Adjustments were larger. The 2.7% COLA in 2026 will break that 30-year streak during which there wasn't a single half-decade period when COLAs were so big.

Is this record a good thing for seniors?

Five years of super-sized Cost-of-Living Adjustments may seem like a good thing for retirees who received more money from Social Security. But that's actually far from the case. COLAs increase substantially when inflation increases substantially, and inflation isn't good for seniors. While Social Security benefits increase with rising prices, retirees' other investments don't necessarily outpace inflation since seniors tend to invest more conservatively. As a result, price surges aren't good for savers living on a fixed income.

Ultimately, every retiree should hope that these upcoming years don't follow the trends of the late 1980s and early 1990s, and that 2026 is the last year when their COLA is quite so large.

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