At this stage of the year, seniors on Social Security tend to get a little antsy waiting for news of their upcoming cost-of-living adjustment, or COLA. The reality is that many baby boomers today have only or mostly Social Security to live on. For people in that situation, COLAs are extremely important.
It’s a bit premature to know exactly what 2026’s Social Security COLA will look like. That’s because COLAs are based on inflation readings from July, August, and September. Since we’re not even quite at the midpoint of August, there are still many missing pieces from the COLA puzzle.
However, seniors on Social Security did recently get some updated information on the 2026 COLA. And it’s actually good news this time around.
A positive update
On August 12, the Bureau of Labor Statistics released data on July’s Consumer Price Index. Part of that report included an update on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is the specific index Social Security COLAs are based on.
Based on that, the latest projection for 2026’s Social Security COLA just increased to 2.7%. This is good news for a couple of reasons.
First, it beats 2025’s Social Security COLA of 2.5%. Secondly, it’s the highest COLA projection to come out since the start of the year.
Of course, this doesn’t mean that next year’s Social Security COLA is guaranteed to come in at 2.7%. But if inflation continues to tick upward like it’s been doing, it could result in a more generous raise for Social Security recipients.
Don’t just bank on a larger Social Security COLA
If you’re happy about the fact that your Social Security checks may rise more in 2026 than they did in 2025, that’s understandable. However, the reality is that if you rely heavily on Social Security COLAs to keep up with your bills, and you’ve been struggling financially, it’s probably going to take a lot more than a 2.7% COLA to improve your financial picture.
If you want to be less stressed about money, it may be time to make changes to the way you live. That could mean reducing expenses by downsizing, or even cutting out some extras you can manage without. It could also mean relocating to a part of the U.S. where living costs are cheaper than where you live now.
If money is particularly tight, another option worth looking at is working part-time. The gig economy allows people to work more flexibly these days, so you may find that a part-time job doesn’t upend your schedule too badly.
You could even, if your financial situation warrants it, consider moving in with a grown child for a year or two to build up some savings. That may be a smart thing to do regardless of what next year’s Social Security COLA looks like.
You’ve probably heard that Social Security cuts are a possibility in less than a decade from now. So if you’ve been having a hard time keeping up with expenses, it’s a good idea to have more of a long-term plan anyway.
The Social Security Administration should make an official 2026 COLA announcement in October. Until then, you can perhaps take comfort in the fact that next year’s projection just rose. Just don’t overlook the big picture – that you might still need to make some lifestyle changes to improve your situation in the long run.
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