Social Security 2026 COLA Increase Update as New Prediction Released

The Social Security cost-of-living adjustment (COLA) for 2026 is now projected to increase 2.3 percent from 2025, according to new data released by The Senior Citizens League (TSCL).

The updated forecast comes amid economic uncertainty sparked by the Trump administration's recent announcement of broad new tariffs on imports, which were partially paused on Wednesday.

Why It Matters

The COLA adjustment affects more than 70 million Americans receiving Social Security and Supplemental Security Income. It is intended to offset inflation and help beneficiaries maintain purchasing power.

However, when inflation is driven by structural policy changes such as tariffs, some costs may rise faster than the COLA increase, effectively diminishing its benefit.

What To Know

TSCL increased its COLA estimate for 2026 to 2.3 percent, up 0.1 percent from last month's prediction.

TSCL's projection, which is updated monthly, is driven by its proprietary model incorporating key economic indicators such as the Consumer Price Index for Urban Wage Earners (CPI-W), Federal Reserve interest rates, and national unemployment rates.

The 2.3 percent COLA projection is based on March 2025 CPI-W data. Any inflationary effects from April's tariff announcements are expected to begin showing in subsequent months' CPI-W figures, which TSCL uses to update its projections.

The current 2.3 percent estimate is slightly below the 2025 COLA of 2.5 percent, and seniors may face reduced purchasing power as a result of Trump's tariffs, many of which are currently paused.

TSCL Executive Director Shannon Benton warned of the potential impact of tariffs on seniors.

"Placing broad-based tariffs on goods from numerous countries could have a profoundly negative impact on the daily lives of seniors, including the costs of drugs and medical equipment that many seniors rely on," Benton said in a statement. "It is also highly likely that import taxes will keep food prices high, increase auto insurance costs, and contribute to higher inflation, among other effects."

The organization said Trump's newly proposed tariffs will likely cause medical costs and drug prices to rise sharply, disproportionately affecting seniors.

The Journal of the American Medical Association has estimated that new import taxes could impact up to 400 drug products from Canada, with even more affected from nations like China, India, and Mexico.

Trump has said the United States will impose tariffs on more than 180 countries and a 10 percent "baseline" tariff on all imports.

However, after widespread criticism from Republicans and advisers, Trump issued a 90-day pause for the tariffs and a lower reciprocal tariff rate of 10 percent. It is unclear how these actions will impact the larger inflation rate, which drives the yearly COLA for Social Security payments.

What People Are Saying

TSCL Executive Director Shannon Benton said in a press release: "While TSCL supports President Trump's goals of returning manufacturing and strategic production to American shores, we can't accept the short-term consequences for seniors. We call on the administration to immediately make exceptions to the tariffs for drugs, medical equipment, and essential everyday goods that many seniors already struggle to afford."

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "The COLA prediction is rising specifically on the back of tariffs and the possible increase in pricing. Since inflation is based on a basket of goods and/or services, the inevitable impact of tariffs will need to be taken into account to accurately predict the possible rise in future prices."

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "While seniors may not be the first age group most would link to having financial issues through tariffs, the reality is they could be some of the hardest hit. Seniors may not be buying the latest iPhone, but they often need additional technology for healthcare and wellcare later in life that are either fully created or have parts that come from many countries that just had a 10 percent tariff applied to them. Combine that with talk of adding tariffs on pharmaceuticals, as well, and you can see what cost of living adjustments could soar higher for different programs in the coming year."

What Happens Next

TSCL will continue releasing monthly COLA projections, adjusting for inflationary changes and economic trends. The next update will include CPI-W data from April 2025, likely capturing more of the initial impact from tariff adjustments.

"Much of what the final number will be still centers on the final tariff amounts that will be implemented after the 90-day pause," Beene said.