The projection for Social Security’s annual cost-of-living adjustment (COLA) for next year is getting higher, according to a new report.
The Senior Citizens League on Tuesday released an update that showed its model now forecasts the 2026 COLA will be 2.7% as of July – an increase from its previous estimates of 2.5% in May and 2.6% in June.
The uptick comes as inflation has trended higher in recent months. Social Security’s COLA is used to adjust the amounts paid to beneficiaries to account for inflation pushing prices higher, and the COLA for 2025 was 2.5% and took effect at the start of the year.
The Senior Citizens League noted that its estimate may continue to evolve in the next few months ahead of the Social Security Administration’s official announcement in October, as more inflation data is incorporated into the model.
KEEPING SOCIAL SECURITY FROM GOING BROKE REQUIRES TAX HIKES THAT WILL HIT YOUNGER AMERICANS FOR 6 FIGURES
The report comes as Social Security is marking its 90th anniversary on Thursday, as the safety program faces mounting financial challenges that are projected to lead to its insolvency in less than a decade barring reforms.
The trustees of Social Security’s trust funds – which are currently used to augment payroll taxes collected to make payments to beneficiaries – said the trust funds are now expected to reach insolvency in the first quarter of 2034 following changes to tax policies under the One Big Beautiful Bill Act.
SOCIAL SECURITY CHIEF FIRES BACK AT WARREN OVER AGENCY ‘MISMANAGEMENT’ CLAIMS WITH PERFORMANCE DATA
The nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated that the trust funds will be insolvent in late 2032, at which time an automatic 24% benefit cut would occur because current law requires that benefits be reduced to match incoming payroll tax revenue if the trust funds are depleted.
The CRFB estimated that would amount to an $18,100 annual benefit cut for a dual-earning couple retiring at the start of 2033, or a reduction of about $1,500 a month in household benefits.
TAX CHANGES WILL MAKE SOCIAL SECURITY GO INSOLVENT SOONER THAN PREVIOUS ESTIMATE
President Donald Trump on Thursday signed a proclamation and delivered remarks in recognition of Social Security’s anniversary and said that the law signed by President Franklin D. Roosevelt in 1935 is “one of the most significant pieces of legislation ever signed into law,” adding that “we’re going to make it stronger, bigger and better.”
“In the campaign, I made a sacred pledge to our seniors that I would always protect Social Security and, under this administration, we’re keeping that promise and strengthening Social Security for generations to come.”
“You keep hearing stories that in six, seven years, Social Security will be gone and it will be if the Democrats ever get involved, because they don’t know what they’re doing. But it’s going to be around a long time with us,” Trump said.
Social Security Commissioner Frank Bisignano noted the Social Security Administration’s efforts to revamp and improve its customer service offerings for beneficiaries, noting the agency has reduced average call wait times and office wait times, while also improving the agency’s website uptime and accessibility.
Read the full article here
