It's not exactly a secret that many older Americans rely heavily on Social Security to make ends meet. And without those benefits, a good number of retirees would not have the means to cover even basic expenses like shelter and food.

Of course, living on Social Security alone in retirement is not an ideal thing to do. Those benefits only replace about 40% of the typical worker's preretirement income, and most seniors need a larger percentage of replacement income to cover their bills comfortably.

Image source: Getty Images.

Still, a lot of people don't manage to save for retirement due to a variety of reasons, from stagnant wages to healthcare bills to other expenses that monopolize their paychecks year after year. So many seniors inevitably end up getting all or most of their retirement income in the form of a monthly Social Security check.

It's for this reason that Social Security's cost-of-living adjustments (COLAs) are so important. Those COLAs are meant to give seniors a way of keeping up with their expenses as living costs rise.

Although it's too soon for the Social Security Administration to announce a COLA for 2026, there are estimates as to what that number might be based on recent economic data. But as of now, 2026's Social Security COLA projection has the potential to very much be a good news/bad news situation.

This year's COLA let seniors down

At the start of 2025, seniors on Social Security saw their benefits increase by 2.5%. But that COLA was disappointing to a lot of people, and for good reason.

First, early in the year, inflation managed to outpace that COLA, putting seniors behind. But also, this year's 2.5% COLA was the smallest Social Security raise to arrive in years. And many retirees were hoping to see a larger boost to their monthly benefits, especially at a time when Medicare costs also went up.

2026's Social Security COLA may or may not disappoint

Social Security COLAs are tied directly to inflation. But because they're based on third-quarter inflation readings, it's too early in the year to say with certainty what 2026's COLA will amount to.

That said, the nonpartisan Senior Citizens League can use current inflation data to make a prediction about future COLAs. And based on the most recent inflation readings, it's calling for a 2.3% Social Security COLA in 2026.

Let's start with why that's not ideal. First, a 2.3% raise is on the stingy side. It's also even smaller than the 2.5% COLA Social Security recipients got this past January.

But the news isn't all bad. And the reason is that a smaller COLA is an indication that inflation is cooling off.

To put it another way, what Social Security recipients lose in the form of a smaller COLA, they gain in the form of more moderate price increases.

In fact, one thing to realize about Social Security COLAs is that they're not designed to help seniors get ahead of inflation. Rather, the purpose is to help them keep up with it. But a 2.3% COLA in 2026 might more than get the job done in that regard.

So anyone who's disappointed to read that next year's COLA may amount to 2.3% should look at the big picture and realize that it's not always a terrible thing to get a smaller Social Security raise.