Social Security replaces about 40% of pre-retirement income for many retirees and provides guaranteed lifetime benefits. Benefits are protected against inflation through Cost of Living Adjustments (COLAs) that are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). COLAs occur most years but not always and help benefits rise with prices. The precise 2026 COLA will be determined in October when the official data are available. Current data and projections indicate the 2026 COLA will be slightly larger than the 2025 COLA, with the Senior Citizens League projecting a 2.7% increase.
Social Security is a crucial income source that many retirees rely on pretty heavily to help them make ends meet. While these benefits only replace around 40% of pre-retirement income, they are guaranteed to last for life, unlike savings, and they are also protected against the effects of inflation because periodic raises are built into the Social Security benefits system.
COLAs happen most, but not all, years, and they are a lifeline for seniors because they help to ensure that benefits rise as prices do. That's why many retirees keep careful tabs on what their annual raise is likely to look like. Now, we won't know that for sure until October because the data that determines the benefit increase won't be available until then. However, we have some data in place already that can provide good insight into how the raise is shaping up.
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