Social Security Benefits Aren't Enough to Live On. The 2026 Raise Won't Change That.

Many Social Security recipients are eagerly awaiting news of the cost-of-living adjustment (COLA) they are on track to receive in 2026. COLAs help to ensure that people who use the program as an income source lose less buying power as a result of inflation.

The COLA is going to be announced by the end of October, giving benefit recipients crucial details about what their budgets will look like next year. Right now, the raise is on track to be a little bit bigger than the one for 2025, although it's not a given that this will be the case.

Regardless of how much the COLA is, though, it is not going to make Social Security benefits enough to live on. Here's why.

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Social Security can't be your sole income source

While it may come as a disappointment to retirees, the sad reality is that Social Security alone is not enough to cover all your costs once you stop working. In fact, retirees who try to rely solely on their benefits are likely to have a really hard time making ends meet: The average monthly benefit in 2025 is $2,008.31, so it would produce only around $24,100 in income each year.

Anyone surprised at the size of this benefit should know that the program was never meant to be a sole source of support. It was supposed to work along with a pension and savings in retirement plans to create a three-legged stool offering support during your later years.

Since Social Security is supposed to be only one of multiple income sources in retirement, the benefits were designed to replace around 40% of your pre-retirement income. Experts recommend that you plan to replace around 70% to 90% of what you were earning during your retirement planning process -- which means saving plenty of money to supplement the program.

In fact, since pensions are no longer offered to most workers, the rest of your retirement funds will need to come from distributions out of your retirement accounts, which means you should be contributing money to a 401(k) or IRA throughout your working life.

This is true even for high earners who are in line for the maximum Social Security benefit of $5,108 per month. This would provide $61,296 in income annually, but it's available only to very high earners, so those who qualify for it would still need to downgrade their lifestyle substantially without plenty of other income sources. It might be enough to live on, but not to maintain the same quality of life that recipients of this benefit are used to.

Even a big COLA won't increase benefits as much as it should

For those who do rely on their benefits to help them cover retirement costs, the good news is that there are protections in place to help mitigate the impact of inflation. Cost-of-living adjustments (COLAs) are built into the program so your Social Security check increases in most years to help account for rising prices.

In 2026, benefits will be going up because the COLA formula will likely show that the cost of goods and services has risen. While there has been no official announcement yet of how big a raise retirees are getting, current estimates suggest they are in line for a 2.7% increase. The actual amount will be announced on Oct. 24, so retirees will know exactly how much bigger their checks will be after Jan. 1.

The benefit bump is important because otherwise, seniors would lose too much buying power. However, a 2.7% raise (or anything close to it) is not going to change the fact that Social Security can only be a part of your income as a retiree.

In fact, there is concern that the COLA formula undercompensates for the inflation retirees actually experience, because the formula calculates the raise based on a consumer price index measuring the cost of goods and services for urban wage earners and clerical workers. And their spending habits don't match the habits of seniors.

This issue with the COLA formula makes it even more important that retirees don't rely on Social Security alone since benefits tend to lose ground over time. This will leave seniors with less money later in life when they may develop health issues that require the benefits the most.

Ultimately, if you want to make sure you have financial security as a senior, you'll need plenty of savings. By investing diligently with the goal of replacing around 40% to 50% of what you were earning before leaving work, you can be more secure during your later years.

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