Bad news for Social Security recipients in latest 2026 COLA projection
Those who receive Social Security benefits are being warned that next year’s cost-of-living-adjustment (COLA) could be even lower than the 2025 adjustment. On Tuesday, The Senior Citizens League announced its latest forecast for the 2026 COLA is at 2.3%, which is lower than the 2.5% COLA in 2025.
The nonpartisan senior advocacy group announced the prediction after the Bureau of Labor Statistics released its latest data regarding the Consumer Price Index for Urban Wage Earners (CPI-W). With CPI-W coming in at 3%, TSCL expects the 2026 COLA to be minimal.
The COLA is calculated by using the CPI-W for the months of July, August and September. That number is compared to the same time period from the year prior to determine the COLA. The CPI-W is calculated by analyzing factors in the spending habits of Americans when it comes to items like food, consumer goods, housing, health care and more.
If the prediction holds, the 2026 COLA would mark the third consecutive year of declining adjustments. In 2023, the COLA was a record 8.6%, and dropped to 3.2% in 2024. The 2025 COLA came in at 2.5%.
While that’s not good news for Social Security beneficiaries, TSCL says a newly reintroduced bill in Congress could help ease the financial burden. Rep. Thomas Massie (R-Ky.) reintroduced the Senior Citizens Tax Elimination Act which would eliminate taxes on Social Security benefits.
TSCL estimates that if taxes were eliminated on Social Security benefits, it would save the typical senior household roughly $3,000 annually.
“Eliminating taxes on Social Security benefits would be an excellent step to provide financial relief to American seniors, many of whom are struggling with a cost of living that is growing much faster than their incomes,” said TSCL executive director Shannon Benton. “It would also reduce double taxation, which is inherently unjust.”
Advocates for the bill say the current system unfairly taxes beneficiaries who’ve already paid tax on their contributions to Social Security through the payroll tax. And while that may help some beneficiaries, Benton says lower-income seniors need more help.
“However, we need to do even more for low-income seniors whose dignity depends on Social Security payments that have already lost 20 percent of their buying power over the last 15 years,” Benton said. “Many lower-income seniors already do not make enough to pay taxes on their Social Security benefits, and the only way to help them is by reforming Social Security’s COLAs.”