Retirees Are 'Terrified' Tariffs Will Cancel Out the Social Security COLA

Feeling panicky about the impact of tariffs and inflation on your retirement plans? You're not alone.

Half of retirees say they are “terrified” that tariffs could reduce their retirement income or savings, and 63% say they are worried President Donald Trump’s trade policies may drive inflation above what Social Security’s yearly cost-of-living adjustment (COLA) would cover, according to Nationwide Retirement Institute’s 12th annual Social Security survey.

“Today’s retirees are facing economic headwinds that feel more unpredictable and immediate than ever before,” Tina Ambrozy, head of strategic customer solutions at the financial services firm Nationwide, said in a Tuesday news release. “With inflation on the rise and new tariffs adding to economic uncertainty, more Americans are worried about whether Social Security will be enough to support them.”

Current retirees are actually less likely than those who haven’t retired yet to believe the effects of tariffs could eclipse Social Security’s 2026 COLA. The survey found 70% of nonretirees were concerned about that possibility. Nationwide also said people who receive professional financial advice were more likely to be concerned about the issue than those who don’t receive such advice.

Nationwide’s new survey, which includes responses from over 1,800 U.S. adults, underscores how spooked Americans are about Social Security benefits waning more broadly. Some 83% of all respondents reported being concerned about the “long-term viability” of Social Security, with about three quarters saying that they expect Social Security to run out of funding in their lifetimes.

Social Security is indeed dealing with serious financial challenges. Its trust funds are expected to run dry by 2034 if Congress does not act by then. If that were to happen, the program would still exist, but benefits would be reduced by about 19%.

Social Security COLA: What to expect in 2026

Each year, Social Security benefits are recalculated based on recent inflation trends. Beneficiaries are usually given a raise to their monthly checks — known as a COLA — if inflation has been ticking up.

Current COLA predictions, which are based on inflation readings from the past several months, estimate Social Security payments will rise by 2.7% in 2026. The official COLA calculation, however, won’t be announced until October, as it's based on third-quarter inflation data. Beneficiaries won’t actually begin receiving the raise until later, in December and January 2026.

While the COLA is designed to help beneficiaries weather inflation, true price increases can — and often do — diminish the raise.

According to The Senior Citizens League, an advocacy organization for older Americans, the typical Social Security payment has lost approximately 20% of its buying power since 2010. This happens when the COLA, which is calculated in the fall of the prior year, lags behind the true inflation beneficiaries experience in the subsequent months before the next adjustment.

The Nationwide survey suggests tariffs are fueling fears the trend could get worse.

That’s because Trump’s tariffs are expected to exacerbate inflation — and, by extension, impact the 2026 COLA. According to the Budget Lab at Yale, tariffs are projected to push inflation up by an additional 1.8 percentage points in the short run, equivalent to an average household income loss of $2,400.

But it’s unclear exactly when these price increases may actually show up. If inflation rises due to tariffs before September (the final month the Social Security Administration uses to calculate the COLA), beneficiaries may get a bigger raise in 2026.

However, if the effects of tariffs don’t appear until later, people who rely on Social Security checks could be forced to deal with rising prices after the COLA has been locked in.

More from Money:

Over Half of Older Employees Plan to Work 'Indefinitely' and Never Retire

Should You Invest Your 401(k) in Private Equity?

New Bill Proposes $600 'Tariff Rebate' Stimulus Checks