As the price of goods continues to rise in the U.S., Social Security beneficiaries are being warned that the 2026 cost-of-living-adjustment (COLA) may not keep up with those costs. According to The Senior Citizens League, the group’s latest prediction for the 2026 COLA is coming in a 2.2%, down from the 2.5% COLA in 2025.
The nonpartisan senior advocacy group’s prediction comes after new data was released Wednesday by the Bureau of Labor Statistics. The yearly COLA is calculated by using Consumer Price Index for Urban Wage Earners (CPI-W) for the months of July, August, and September each year. Those numbers are compared to the year prior and a new COLA is calculated.
The spending habits of Americans on items like food, consumer goods, housing, health care and more are used to calculate the CPI-W. On Wednesday, the latest CPI-W came in at 2.7%, down from 3% in January, leading to the 2.2% COLA prediction.
If the 2026 COLA were to land at 2.2%, it would mark the third consecutive year of declining adjustments. In 2023, the COLA was a record 8.6%, and dropped to 3.2% in 2024. The 2025 COLA came in at 2.5%.
In Wednesday’s report, the Bureau of Labor Statistics reported that prices in general are up 2.8% year-over-year, meaning last year’s 2.5% COLA isn’t keeping up with the rising cost of goods. Food prices are up 2.6% year-over-year and the shelter index — which tracks the cost of housing services for renters and homeowners — is up 4.2%.
A bill introduced last month by Rep. Thomas Massie (R-Ky.) would eliminate taxes on Social Security benefits. Known as the Senior Citizens Tax Elimination Act, TSCL estimates the move would save the typical senior household roughly $3,000 annually.
“Eliminating taxes on Social Security benefits would be an excellent step to provide financial relief to American seniors, many of whom are struggling with a cost of living that is growing much faster than their incomes,” said TSCL executive director Shannon Benton in February. “It would also reduce double taxation, which is inherently unjust.”
The bill was referred to the House Ways and Means Committee, but no further action has been taken.