Social Security retirees got a 2.8% Cost of Living Adjustment (COLA) this year, and retirees have now received their first bigger checks of the new year.
For many, the 2.8% benefits bump may feel too small to have made a difference in their spending power — especially given that Medicare premiums increased in 2026 as well. That meant most retirees who pay Medicare premiums from their Social Security check saw $17.90 of their COLA taken away due to these added medical care costs.
As retirees adjust to a 2026 benefit that may still feel smaller than they’d like it to be, there is some bad news on the horizon about the Cost of Living Adjustment applied to their retirement checks. This news comes from the Senior Citizens League, a senior advocacy organization.
Here’s what the news is, along with some details on why it matters.
Based on early estimates from the Senior Citizens League, it’s looking like the 2027 COLA is on track to be even smaller next year than it was this year.
The Senior Citizens League bases its assessment on each year’s COLA on data from the Bureau of Labor Statistics. The Bureau publishes consumer price indexes, including CPI-W, which is a price index that tracks the spending power of urban wage earners and clerical workers. It’s used to determine how much the COLA should be each year.
The January BLS data on the consumer price index is out now, and it shows that in December, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) demonstrated a 2.6% year-over-year increase. While this data will not be included in the official COLA calculation, it’s still helpful in understanding patterns that will affect the Cost of Living Adjustment, as the official COLA is calculated based on average changes to CPI-W during the third quarter of the year.
Based on this early information and the way it believes the numbers are trending, the Senior Citizens League believes that in 2027, retirees are on track for a 2.5% Cost of Living Adjustment.
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This early estimate is almost assuredly a big disappointment to retirees for a simple reason: A 2.5% COLA next year would be smaller than this year’s Cost of Living Adjustment.
Many retirees already report struggling to cover their costs on Social Security and have indicated that Cost of Living Adjustments are not large enough to help them deal with the real inflation that they are experiencing. The issue is that CPI-W tracks spending for urban wage earners and clerical workers. Given that this group has different spending habits than seniors, the COLA formula is an imperfect one. The Senior Citizens League has conducted assessments to determine that this flaw in the formula resulted in Social Security benefits losing 20% of buying power since 2010.
Since seniors already feel like they aren’t getting enough, a smaller COLA next year is only likely to make those feelings of financial stress worse — especially given that larger COLAs have become normalized in the post-COVID era with a 3.2% COLA in 2024, an 8.7% COLA in 2023, and a 5.9% COLA in 2022.
Of course, this estimate may change — but it’s not a good early sign for seniors. Those who are concerned that a smaller COLA won’t give them the money they need should consider talking with a financial advisor to create a plan for safe withdrawals and for stretching funds in retirement.
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