<p>Why you can trust us</p>
<p>We may earn money from links on this page, but commission does not influence what we write or the products we recommend. AOL upholds a rigorous editorial process to ensure what we publish is fair, accurate and trustworthy. </p>
<p>Projected COLA for 2026: July update — how it's calculated and what it means for your retirement</p>
<p>Melanie Lockert July 16, 2025 at 3:37 AM</p>
<p>Projected COLA for 2026 (Douglas Sacha via Getty Images)</p>
<p>More than 74 million people receive Social Security benefits, according to July 2025 data from the Social Security Administration (SSA). Many of them rely on Social Security for their financial well-being. For some 21.8 million seniors, it may be their only form of income in retirement.</p>
<p>The SSA applies an annual cost-of-living adjustment — more commonly called COLA — to benefits each year to help you keep up with rising inflation. It's still too early to predict the actual adjustment, but with new tax legislation falling short for low-income seniors and inflation creeping up in June after months of declines, the nonpartisan Senior Citizens League (TSCL) projects the Social Security COLA for 2026 at 2.6% as of July — its most recent prediction for 2026 — revised from its lower prediction of 2.5% in June. The new prediction is a steady increase from the projected COLA of 2.1% at the start of 2025, and slightly higher with last year's actual 2.5% cost-of-living adjustment.</p>
<p>Despite adjustments, the TSCL estimate is not trending higher compared with recent years, sparking worries of financial insecurity for seniors. However, there is still time for things to take a turn, as official COLA increases won't be announced until October. Learn more about how Social Security COLA is calculated and its impact on seniors.</p>
<p>How is Social Security COLA calculated?</p>
<p>The Social Security cost-of-living adjustment aims to level the playing field and boost benefits in step with rises in inflation. The adjustments aren't arbitrary. The Social Security COLA calculation uses data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) released by the Bureau of Labor Statistics at a specific point in time to inform the increase.</p>
<p>"The SSA COLA is not a mystery, it is based on the CPI-W," says Brooke Petersen, CFP, ChFC and wealth consultant at investment advisory firm Conrad Siegel. "The COLA is based on the percentage increase in the CPI-W from the third quarter of the previous year to the third quarter of the current year."</p>
<p>Set by law, this calculation has been automatic since 1975, thanks to a COLA provision in the 1972 Social Security Amendments. Since 1975, there have been three years when the calculation resulted in a 0.0% COLA because there wasn't an increase in the CPI-W: 2010, 2011 and 2016.</p>
<p>🔍 Learn more: How to find a trusted retirement advisor for peace of mind in your golden years</p>
<p>What is the 2026 COLA prediction?</p>
<p>The current Social Security COLA projection for 2026 is 2.6%, according to the Senior Citizens League. TSCL its 2026 COLA prediction based on June CPI-W data, which came in at a high 2.7% on July 15. TSCL's cost-of-living-adjustment projection is an increase from 2.5% last month, when May's CPI-W came in at 2.4%.</p>
<p>If TSCL's estimate for 2026 holds, seniors can expect next year's COLA to be higher than last year's COLA, when the adjustment was 2.5%.</p>
<p>But remember, this is only an estimate of potential COLA increases for 2026. The official COLA increase uses third-quarter data from July to September, so it's too early to tell. "Nearly everyone was wrong about the path of inflation in 2024," says Petersen.</p>
<p>COLA over the last decade: 2015 to 2025</p>
<p>COLA has varied widely over the past 10 years. The lowest COLA in that timeframe was in 2016 at 0.0%, and the highest was in 2023, when COLA was a whopping 8.7%.</p>
<p>The Social Security 2025 COLA increase was a lower 2.5%.</p>
<p>Year</p>
<p>COLA adjustment</p>
<p>2015</p>
<p>1.70%</p>
<p>2016</p>
<p>0.00%</p>
<p>2017</p>
<p>0.30%</p>
<p>2018</p>
<p>2.00%</p>
<p>2019</p>
<p>2.80%</p>
<p>2020</p>
<p>1.60%</p>
<p>2021</p>
<p>1.30%</p>
<p>2022</p>
<p>5.90%</p>
<p>2023</p>
<p>8.70%</p>
<p>2024</p>
<p>3.20%</p>
<p>2025</p>
<p>2.50%</p>
<p>Source: Social Security Administration</p>
<p>The projected 2026 COLA for Social Security is 2.6% according to a July 15 TSCL press briefing, which is only slightly higher than last year's adjustment. That percentage is likely to change, but the concern is that the COLA increase isn't enough.</p>
<p>A survey by the Employee Benefit Research Institute echoes that sentiment, with 81% of workers and 66% of retirees concerned about rising costs, and 40% of retirees saying that healthcare expenses are higher than expected in retirement.</p>
<p>🔍 Learn more: What's the average Social Security payment for July 2025?</p>
<p>What the 2026 COLA increase means for your retirement</p>
<p>If you're currently receiving Social Security benefits, the projected 2026 COLA for Social Security can give you an idea of what kind of increase you might see. But you'll have to hold tight for the official numbers.</p>
<p>"The COLA applied to beneficiaries' checks starting in January [of next year] will be calculated and announced in October," says Martha Shedden, president and co-founder at the National Association of Registered Social Security Analysts.</p>
<p>The increase can help battle inflation and try to retain purchasing power, but other costs offset the benefit of your Social Security benefits.</p>
<p>"Medicare Part B premiums have the largest impact on the net amount of retirees' Social Security income since those premiums are deducted from the Social Security checks," says Shedden.</p>
<p>The main issue is that the COLA increase doesn't account for all of the added costs everyone's facing, especially seniors paying for Medicare on limited incomes.</p>
<p>"As we have all experienced, the cost of goods and services are significantly higher," says Petersen. He explains that the increases for Medicare Part B and Medicare Part D have significantly exceeded the Social Security COLA, eroding purchasing power.</p>
<p>As of now, the Social Security COLA projection for 2026 is a slight increase from the 2025 COLA, which could feel like a bigger blow. But we'll have to wait a few more months until October to find out.</p>
<p>🔍 Learn more: 100 best (and hidden) discounts for ages 50+: Groceries, dining, retail, travel and more</p>
<p>Other stories in our retirement planning series -</p>
<p>The 4% rule for retirement: Is it time to rethink this popular withdrawal guideline?</p>
<p>Can you really retire with $500,000 in savings and investments? (Yes, it's possible)</p>
<p>Should you ever use a 401(k) loan to pay off debt? Pros, cons and considerations</p>
<p>How healthy are your finances, really? 4 money questions to ask yourself today</p>
<p>How to recession-proof your retirement: 7 smart strategies to fortify your nest egg</p>
<p>FAQs: Social Security and your retirement</p>
<p>Learn more about Social Security and your benefits with these commonly asked questions. And take a look at our growing library of personal finance guides that can help you earn money, save money and grow your wealth.</p>
<p>What is the average Social Security check?</p>
<p>The average Social Security check is $1,952.23 as of July 2025, according to the latest data from the Social Security Administration. Individual monthly benefits vary and could be more or less than the average.</p>
<p>What is the Senior Citizens League?</p>
<p>The Senior Citizens League calls itself the one of the nation's largest nonpartisan seniors groups with a mission to educate older Americans and retirees about their rights and freedoms as U.S. citizens and protect the benefits — including Social Security — they've earned and paid for.</p>
<p>I'm worried about outliving my retirement savings. What are some tips to make it last longer?</p>
<p>As you approach retirement, one of the most critical decisions you'll face is how to strategically withdraw from your hard-earned savings. The order in which you tap into your various retirement accounts can significantly impact your tax burden and the longevity of your nest egg funds. While there's no one-size-fits-all withdrawal order, learn general rules of thumb in our guide to a retirement withdrawal strategy.</p>
<p>How long has Social Security been around?</p>
<p>Social Security was signed into law by President Franklin D. Roosevelt in August 1935 with the Social Security Act to provide income to Americans in retirement. The country began paying taxes into the program starting in 1937.</p>
<p>That first year, recipients received benefits as a one-time payment. Monthly Social Security benefits started in 1940.</p>
<p>Is it worth it to join AARP?</p>
<p>From its start, AARP's mission has been to help older Americans save money and improve their quality of life. Today, it has grown into America's largest nonprofit organization with more than 35 million members, advocating for issues that affect seniors and retirees, including Medicare and Social Security, age discrimination in the workplace and lower prescription costs. Under $20 a year for new members, your membership unlocks a range of senior discounts, insurance savings and wellness perks, yet some members report unwanted spam and physical mail after joining. Learn more about the benefits, drawbacks and whether membership is worth it in our independent guide to an AARP membership.</p>
<p>Is my retirement safe from bankruptcy?</p>
<p>In most cases, retirement funds, pensions and even Social Security benefits are safe from being taken from creditors to repay your outstanding debt, but it depends on the accounts in question and how much you have in those accounts. Talk with a reputable attorney for legal advice or trusted retirement professional for guidance to determine whether bankruptcy is the right option for you. Learn about protecting your savings, investments and more in our comprehensive guide to bankruptcy in retirement.</p>
<p>How much money can I make in retirement and still collect Social Security?</p>
<p>For the 2025 tax year, your annual earnings limit is $23,400. If you'll reach full retirement age in 2025, the most you can earn in the months before retirement is $62,160.</p>
<p>Enter your birthdate and salary into the SSA's earnings test calculator to see how your earnings before retirement might affect your Social Security benefits.</p>
<p>Sources -</p>
<p>Monthly Statistical Snapshot, June 2025, Social Security Administration. Accessed July 15, 2025.</p>
<p>New TSCL study estimates 21.8 million seniors get by on Social Security alone, Senior Citizens League. Accessed July 15, 2025.</p>
<p>2025 EBRI/Greenwald Retirement Confidence Survey, Employee Benefit Research Institution. Accessed July 15, 2025.</p>
<p>Cost-of-Living Adjustment (COLA) Information for 2025, Social Security Administration. Accessed July 15, 2025.</p>
<p>As The One Big Beautiful Bill Passes, 2026 COLA Prediction Rises to 2.6%, The Senior Citizens League. Accessed July 15, 2025.</p>
<p>Consumer Price Index Summary, U.S. Bureau of Labor Statistics. Accessed July 15, 2025.</p>
<p>About the writer</p>
<p>Melanie Lockert is an L.A.-born and Brooklyn-based freelance writer with a decade of experience in personal finance. Melanie started the Dear Debt blog in 2013 and chronicled her journey out of $81,000 in student loan debt. She published a book of the same name in 2016. Her personal finance expertise has been featured on Fortune Recommends, CNN, Yahoo Finance and Business Insider, among other publications. She is also the host of the Mental Health and Wealth Show and cofounder of the Lola Retreat, a finance event for women.</p>
<p>Article edited by Kelly Suzan Waggoner</p>
<p>📩 Have thoughts or comments about this story — or ideas on topics you'd like us to cover? Reach out to our team at [email protected].</p>
<a href="https://ift.tt/LUXJGgq" class="dirlink-1">Orign Aricle on Source</a>
Source: AOL Money
Source: AsherMag
Read More >> Full Article on Source: Astro Blog
#US #ShowBiz #Sports #Politics #Celebs