"In 2026, Social Security benefits are getting a 2.8% COLA, which is more generous than the 2.5% raise that came through in 2025. But that doesn't mean seniors' upcoming COLA will go very far. Why 2026's COLA may disappoint seniors There are a couple of reasons why Social Security recipients may be unhappy with their 2026 COLA. First, for seniors who are enrolled in Medicare at the same time, any increase in the cost of Part B will eat away at their upcoming COLA."
"Second, Social Security COLAs have long done a poor job of actually helping seniors maintain buying power. And 2026's COLA is unlikely to be an exception. The nonpartisan Senior Citizens League says that between 2010 and 2024, Social Security benefits lost 20% of their buying power. And a big reason has to do with a flaw in the way COLAs are calculated."
Social Security COLAs are intended to preserve recipients' buying power by adjusting benefits for inflation. COLAs have been automatic since the mid-1970s and are pegged to the CPI-W inflation index. In 2026 benefits will rise by 2.8%, up from a 2.5% increase in 2025. That increase may be largely offset for many recipients by higher Medicare Part B costs. The CPI-W tracks cost changes for urban wage earners and clerical workers rather than retired seniors, producing a persistent gap. Between 2010 and 2024, benefits lost about 20% of their buying power, reflecting the calculation flaw.
Read at 24/7 Wall St.
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