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Social Security’s annual cost-of-living adjustment (COLA) is designed to help seniors deal with inflation by increasing their monthly payments.
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That sounds good in theory. But in reality, the COLA doesn’t always provide enough of a boost to offset rising prices – like right now.
Here’s a look at some of the costs the 2026 COLA does and doesn’t cover.
Latest CPI Numbers
The federal government’s most recent inflation numbers didn’t bring much cheer to consumers struggling with high prices.
Overall inflation in May 2026 climbed 0.5% from the previous month and 4.2% from the previous year, according to the U.S. Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) report.
The 4.2% annual increase was the largest such gain in three years, Reuters reported. Much of it was driven by a huge spike in energy prices tied to the war in Iran, which had a ripple effect on many other consumer expenses.
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For Social Security recipients, the report was especially grim because the 2026 COLA is only 2.8% — well below the current inflation rate of 4.2%.
The problem this year, as in many years, is that the current COLA is based on old inflation data. The 2.8% increase for 2026 was calculated using inflation numbers from the third quarter of 2025. Since then, consumer prices have risen considerably.
With few exceptions, the 2026 COLA does little to help seniors deal with higher prices.
Items Covered by the 2026 COLA
Only four items listed in the latest BLS report had annual inflation rates below the 2.8% COLA (meaning the COLA is big enough to offset inflation).
In two of those cases, average prices have actually fallen over the past year. That’s the good news.
The bad news is, only two of the items covered by the COLA represent common purchases for seniors: food at home and medical care commodities (which includes drugs, dietary supplements, bandages and other supplies).
Here’s a look at the items covered by the 2026 COLA:
Items Not Covered by the 2026 COLA
Eight items in the latest BLS report have annual inflation rates above this year’s 2.8% COLA. In two cases, the inflation rate is more than double the COLA. Each of the eight items represents important spending categories for most seniors.
Here’s a look at the items not covered by this year’s COLA:
Gasoline: +40.5% annual inflation
Electricity: +5.9%
Apparel: 4.8%
Transportation services: +4.1%
Medical care services: +3.6%
Food away from home: +3.5%
Shelter: +3.4%
Utility gas service: +3.0%
Looking Ahead
About the only bright spot regarding this year’s stubbornly high inflation is that it could mean a much bigger COLA in 2027.
The Senior Citizens League (TSCL), a non-partisan advocacy group, estimates that Social Security’s 2027 COLA will be 3.8%. If that estimate holds, it will be the highest COLA since 2023, when the increase was a whopping 8.7% due to historically high inflation.
But even that might not be enough to help seniors navigate inflation, according to TSCL Executive Director Shannon Benton.
“A 3.8 percent COLA might sound like a lot compared to last year’s 2.8 percent, but it won’t be enough to make up the difference between what seniors bring in and what they need to live with dignity,” Benton said in a press release.
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This article originally appeared on GOBankingRates.com: Find Out If Social Security Increases Will Cover Your Higher Food, Energy and Other Costs
