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The projection for Cost of Living Adjustment (COLA) for Social Security in 2026 is expected to be the lowest benefit increase in the last five years, with a May estimate of 2.4%.
The release of the May inflation report from the BLS, the nonpartisan senior advocacy group The Senior Citizens League (TSCL) raised its estimate for the 2026 COLA from 2.3% in April, but it is still below the 2.5% that was awarded for 2025.
The prediction disappointed many people, especially beneficiaries who are looking to keep up with inflation, as they feel that the increase in stimulus payments does not go far enough to cover rising living expenses, which have generated greater uncertainty now with the changes being pushed by the istration of President Donald Trump.
The Seniors Committee (TSCL) adjusted its projection for the COLA for 2026, driven by a slight but steady acceleration in current inflation.
How is the COLA adjustment calculated?
The cost-of-living adjustment, known as COLA, is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (I-W). However, this indicator does not accurately reflect the spending patterns of older adults, who face particular costs, especially in health care.
That is why several experts propose replacing the I-W with the Consumer Price Index for the Elderly (I-E), which gives more weight to medical expenses, a priority need among retirees.
COLA was implemented in the 1970s as a government tool to mitigate the effects of inflation. Since then, it has had considerable variations: in 1980 it recorded its largest historical increase, 14.3%, but just four years later, in 1984, it fell to 3.5%.
It has not exceeded double digits since 1981, although in 2023 it came close with an increase of 8.7%, the highest in more than four decades.