--- title: Social Security Recipients Might Get a Smaller-Than-Normal COLA Next Year description: The projected cost-of-living adjustment, or COLA, for Social Security in 2026 nudged slightly higher this week based on new inflation data. authors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2025-05-15T17:26:51.000Z' modified: '2025-05-15T17:26:51.000Z' section: Retirement tags: - News word_count: 655 canonical: https://money.com/smaller-social-security-cola-estimate-2026/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of a Social Security Card far in the horizon of a sunset at sea](https://img.money.com/2025/05/News-COLA-Tariffs-Horizon.jpg) The projected cost-of-living adjustment, or COLA, for Social Security beneficiaries in 2026 nudged slightly higher this week to 2.4% based on the latest inflation data. That's up from last month's estimates but still falls short of the [2.5% COLA](https://money.com/social-security-cola-2025/) retirees received in 2025. It could also be the smallest benefit bump in five years. Although inflation appears to be cooling — for now — experts warn that the 2026 COLA may not be enough to keep up with the real-world costs that many older Americans are facing, especially when it comes to essentials such as housing, groceries and medical care. The annual COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. As of April, the CPI-W was just 2.1% higher than it was a year earlier, reflecting slower inflation overall. That may sound like a relief — but it's more complicated than you might think. Some of the biggest cost burdens for older adults, including food, housing and insurance, remain elevated. According to a note released Tuesday by independent Social Security and Medicare policy analyst Mary Johnson, "Consumer prices remain stubbornly higher for certain items, notably groceries \[and\] especially animal-based protein sources, such as meats and eggs." Both Johnson and [The](https://seniorsleague.org/cola-update-april/) [Senior Citizens League](https://seniorsleague.org/cola-update-april/), a nonprofit advocacy group**,** are predicting a 2026 COLA adjustment of 2.4%. ## Protect your retirement with a Reverse Mortgage ### If you are over 62, a Reverse Mortgage from Longbridge Financial (NMLS# 957935) can help you take care of expenses or even invest in things that will improve your quality of life. Click on your state to learn more. [Learn More](https://money.com/pr/s978d3010185?ap_referrer=%2Fsmaller-social-security-cola-estimate-2026%2F) ## New executive order could shift drug prices — or not Because the CPI-W doesn't provide a totally accurate picture of retiree spending — in particular, it leaves out the outsized healthcare costs older Americans pay — COLAs often fall short of meeting seniors' financial needs. That said, one exception to the rising costs lately has been prescription medications. According to data from the Bureau of Labor Statistics, drug prices have increased by only 2.3% over the past year. That's a far slower pace than in previous years. The cost moderation is due largely to provisions in the Inflation Reduction Act, a 2022 law that requires drugmakers to pay rebates to Medicare if prices increase faster than inflation. "That provision, which was widely supported by Medicare beneficiaries, could be restraining runaway drug prices," Johnson noted. Also in 2025, another cost-saving measure took effect: a new $2,000 cap on out-of-pocket costs for Medicare-covered prescription medications, giving older adults with chronic conditions some much-needed relief. Adding complexity is a recent executive order from President Donald Trump that promotes "most-favored nation" pricing for prescription drugs. The order encourages linking U.S. drug prices to those paid in other countries, where government-negotiated rates are often significantly lower. However, Johnson said that the order may not have much practical impact — at least, not yet. "An executive order... is not the same thing as a law change giving Medicare the authority to use these prices in negotiations with drug companies," she said. Instead, according to Johnson, the policy seems to promote direct-to-consumer imports of lower-priced medications from abroad, which may not directly affect Medicare-covered drug pricing. "If that doesn't muddy the waters enough, one has to wonder what effect tariffs would have on the final drug prices," she added, referencing [tariff policies](https://money.com/where-when-tariffs-hike-prices/) that could drive costs back up. The official COLA won't be announced until October, when the Social Security Administration finalizes inflation data for July, August and September. Until then, analysts will continue to update their estimates as new inflation reports come in. As Johnson's report puts it, her forecast "may still underestimate the final 2026 COLA," especially as trade and health care policy changes loom in the background. For now, Social Security beneficiaries should prepare for a modest boost in benefits come January — but keep a close eye on the economy and policymakers in Washington who could still shape the final outcome. 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