Latest News
Oh no!!! A COLA Forecast Already? - Yahoo! Finance
While it is far to early to accurately predict the 2026 Cost of Living Adjustment (COLA) for Social Security recipients, predictions inevitably happens about this time every year. After all, next year’s COLA won’t be known until early-October of this year, because COLA is always based on actual inflation experienced during the 3rd Quarter months of July, August, and September. That, however, doesn’t stop special interest groups from making an early forecast which, in this case, suggests that COLA will be down next year.
That COLA will likely be less in 2026 shouldn’t be surprising, because the increases in the cost of living have slowed from the past several years of high inflation. Based on inflation thru March 12, The Senior Citizens League (TSCL), suggests the 2026 COLA will be about 2.2%, or below the average of annual increases seen since 2010. That, however, misses one important point: annual COLA has only averaged about 2.5% for the last two decades, with the high COLA rate in the past few years being more of an anomaly than a normal occurrence. Nevertheless, actual 2026 COLA can only be estimated accurately during the 3rd quarter of each year. Click here to read this article about COLA by Rebecca Holland, published at Yahoo! Finance.
Is it true that they don’t consider the cost of gasoline or the cost of food ? That seems crazy not to. Seniors should get at least a 10 % increase in payment . Congress gives themselves a raise pretty often. Also how is it that they make $ 174,000 a year and after 3 or 4 years the are millionaires ?
Jerry,
The Consumer Price Index (CPI) on which Social Security Cost of Living Adjustments (COLA) are based, does include components for both transportation costs and food costs. The better question is how much weight does that index assign for each category, and also whether that index, itself, is a valid measure of how seniors spend their money. At AMAC, we believe that seniors spend less on, for example, transportation than younger working Americans do, so the CPI used for this measure is likely not appropriate for how seniors spend money. For Social Security COLA, the government uses the CPI-W index for “urban wage earners and clerical workers” which tends to weigh many factors higher than appropriate for seniors, thus not accurately reflecting senior spending habits.
We agree that COLA traditionally does not keep up with actual inflation, mainly because COLA is always awarded after fact (our money has already been spent before COLA is applied).
FYI, you may be interested to know that Congress has not increased their pay since about 2009, but that still doesn’t explain how so many have become millionaires while serving.
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation