2026 COLA Shock: Why Your Social Security Increase May Be Smaller Than Expected

If you’re on Social Security Disability Insurance (SSDI) or approaching retirement, you know how important those annual cost-of-living adjustments (COLA) are. They help your monthly benefits keep pace with the rising costs of everyday life—things like rent, groceries, and healthcare.

Now that we’re well into 2025, there’s growing interest around next year’s adjustment. So what’s the outlook for 2026? Let’s break it down in plain English.

What’s the Latest COLA Forecast for 2026?

Based on the most recent data, several respected organizations are predicting that the 2026 COLA increase will fall somewhere between 2.1% and 2.4%. It’s a modest bump and, honestly, it might not feel like much.

Here’s a quick look at the current estimates:

• The Senior Citizens League initially projected a 2.1% increase, then adjusted it to 2.3%, and now sits at 2.2% based on updated inflation data.

• MarketWatch is leaning slightly higher, forecasting a 2.4% increase.

• Investopedia has been reporting a 2.1% estimate.

To put that in context, the 2023 increase was 8.7%—one of the biggest in decades—due to high inflation. In 2024, it dropped to 3.2%, and the COLA for 2025 is set at 2.5%. So if the 2026 adjustment lands in this predicted range, it’ll be the lowest in several years.

Why the Lower COLA Estimate?

It mainly comes down to inflation. Prices are still rising, just not at the same pace we saw a couple of years ago. That means the COLA—designed to keep up with inflation—won’t need to be as high.

But here’s the thing: the formula used to calculate the COLA is based on something called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. This index tracks price changes in a specific group of workers’ spending, not necessarily how retirees or people with disabilities actually spend their money.

So while the CPI-W might show inflation cooling down, many SSDI recipients are still dealing with rising costs in key areas like:

• Rent and housing, which are up more than 4%

• Medical services, which have climbed by about 2.7%

These are real costs people feel month to month—and they aren’t always captured in the CPI-W.

Some experts and advocacy groups have been pushing for Social Security to use a different index, one designed to better reflect seniors’ expenses. It’s called the CPI-E, and it weights things like healthcare more heavily. But for now, we’re still using the older method.

When Will the 2026 COLA Be Final?

The Social Security Administration announces the official COLA every October. It’s based on the average inflation numbers from July, August, and September of that year.

So while the current estimates are helpful for planning, nothing is set in stone. If inflation unexpectedly spikes or drops during the summer, the actual COLA for 2026 could shift up or down.

What This Means for People on SSDI

Even a small increase in benefits helps, but let’s be real—it might not feel like much. For people on fixed incomes, a 2.2% bump doesn’t necessarily cover the real rise in living costs, especially if rent, food, and medicine are getting more expensive.

If you’re relying on SSDI, this is a good time to:

• Stay updated on inflation and economic news

• Take a look at your monthly expenses and consider whether you might need to adjust your budget

• Keep an eye on the official COLA announcement in October

Right now, the 2026 COLA is shaping up to be modest—likely around 2.1% to 2.4%. It’s a reflection of slowing inflation, but it also means less breathing room for many beneficiaries.

Still, the final numbers won’t be locked in until later this year, so there’s time for things to change. In the meantime, planning ahead and staying informed can make a big difference.

If you’d like a printable version of this or want help breaking down how this might affect your specific situation, I can help with that too. Just let me know.