The passage of the Social Security Fairness Act earlier this year brought a surprise benefit increase for 3.2 million Americans. If you weren't among them, your next opportunity for a benefit boost will come with the 2026 cost-of-living adjustment (COLA).

We still have a while until the official announcement in mid-October, but that hasn't stopped people from speculating where it could end up. The latest projections suggest a COLA that's lower than what seniors have gotten used to over the last few years. But there's also a possibility the official COLA could be higher than recent estimates.

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The latest predictions suggest a 2.3% COLA

Cost-of-living adjustments (COLAs) are based on the increase in the average third-quarter inflation data as reported in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For example, the 2024 third-quarter average was 2.5% higher than the 2023 third-quarter average, so the 2025 COLA became 2.5%.

The latest COLA added just $49 to the average monthly benefit, which many seniors considered inadequate. Current estimates suggest the 2026 COLA may also leave retirees wanting.

The Senior Citizens League (TSCL), a nonprofit senior group, recently announced a 2.3% COLA projection for 2026. This would make it the lowest COLA since the 1.3% increase seniors got in 2021.

A 2.3% increase would bring the $1,981 average monthly retirement benefit as of February 2025 to $2,027 per month -- a $46 increase. Throughout the year, it would add up to $552 extra for a typical senior. This is lower than what many retirees are hoping for, but there's a possibility that the real 2026 COLA will come in higher.

Inflation will decide the 2026 COLA

As discussed above, COLAs are driven by changes in the CPI-W, a government tool to measure inflation. High inflation leads to larger changes in the CPI-W, which leads to a larger Social Security COLA.

The reason TSCL projects a low COLA right now is because inflation has slowed from its pandemic highs of a few years ago. However, that could change as we move deeper into 2025.

All eyes are on President Trump's tariffs, which some economists suggest could lead to increased inflation. If this were to occur, then it's possible that 2025's third-quarter inflation data could be higher than current projections.

This would lead to a higher 2026 COLA. But it probably wouldn't lead to a better standard of living for most Americans. The extra dollars will go toward offsetting the higher cost of goods. Tariffs on things like medications could hit seniors especially hard since retirees tend to spend more on medical care than younger adults.

All of this remains speculation right now. It's unclear what Trump will do regarding tariffs and if or when Americans will feel any repercussions from that. As we get closer to the 2026 COLA announcement in October, we should get a clearer idea of what COLA increase seniors can expect next year. And once the COLA is locked in, it'll be time to start planning your budget for 2026.