For millions of Social Security recipients in the United States, the Cost of Living Adjustment (COLA) is an important part of their financial security.
This annual mechanism is intended to help retirees, disabled workers, and survivors of deceased workers maintain purchasing power in the face of rising prices. Approximately 74.2 million people rely on these adjusted payments to cover basic needs.
With the arrival of summer, interest in the COLA for 2024 is growing. Following recent inflation reports, a new estimate has raised the prospect of an increase in payments for beneficiaries next year.
The final figure, which will be announced in the fall, will be heavily influenced by the movements of key economic indicators from July to September.
How much would the Social Security COLA increase in 2026 according to the July estimate?
The Social Security Administration (SSA) calculates the COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The most recent estimate suggests a 2.7% increase in the 2026 COLA, a slight improvement over last month’s 2.5% projection.
Who benefits from Social Security COLA?
In May, Social Security provided assistance to 74.269 million people across the country. This vast network of beneficiaries includes a diverse range of groups that depend on these payments for their livelihood.
Retired workers.
Disabled workers.
Survivors of deceased workers.
Those who receive Supplemental Security Income (SSI).
Relationship between COLA and Medicare B
Despite COLA’s efforts to maintain the standard of living, beneficiaries frequently believe that the increases fall short. The primary reason for this disparity is that Medicare premiums, particularly Part B premiums, have been rising at a much faster rate than the COLA.
According to Mary Johnson, an independent Social Security and Medicare policy analyst, “It’s not uncommon for Part B premiums to eat up much or even all of the annual COLA, leaving little extra to cover other large cost increases,” she said in a statement.
