By now, all seniors on Social Security should have gotten their first checks for 2025. With the latest 2.5% cost-of-living adjustment (COLA) in effect, the average benefit has climbed to $1,976 per month. That’s about $49 higher than the average in December 2024.

It’s better than benefits remaining stagnant, but this increase likely isn’t going to make life more comfortable for retirees struggling with rising costs. Social Security has lost 20% of its buying power since 2010, according to the Senior Citizens League (TSCL), and that trend seems likely to continue into 2025.

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Though it’s a long way off, some have already turned their eyes toward next year’s COLA in the hope that it will bring some relief. We won’t know the real COLA for months yet, but there are already some telling estimates floating around.

Cooling inflation points to a low COLA for 2026

The Social Security Administration (SSA) bases COLAs on third-quarter inflation data — data from July, August, and September — for the current year and the previous one. We already have all the 2024 figures, though we obviously have a while to wait for the 2025 numbers.

There are several inflation measures, but the one the SSA uses is known as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The use of this index is notably unpopular because it doesn’t consider the spending habits of retirees. That’s tracked by the Consumer Price Index for the Elderly (CPI-E), which is often higher than the CPI-W.

We’re seeing a slowdown in the growth of both indexes compared to early 2024. This suggests cooling inflation. On the one hand, that’s a positive sign because it means that costs aren’t rising as quickly. But if this trend continues, which seems likely, it will result in a smaller increase in the CPI-W, which means a smaller 2026 COLA.

The 2026 COLA will likely be the lowest since 2021

We won’t know the real 2026 COLA until Oct. 15, 2025. That’s when the September CPI report comes in with the final data point the government needs to calculate the COLA. But in the meantime, there’s already speculation about where the COLA could fall.

TSCL estimates it will come in at around 2.1% for 2026. That would increase the current $1,976 average monthly check to about $2,017 per month. That’s an extra $41 per month, or about $492 per year.

This estimate will likely change as we get closer to October and see whether inflation continues to cool or picks up speed again. But TSCL’s projections are usually pretty close. By April 2024, its estimates were only 0.1% off the actual 2025 COLA. So it’s safe to say that, barring a significant uptick in inflation, retirees will probably see a smaller increase heading into next year.

But the COLA might not be the only benefit change to watch for. President Biden passed the Social Security Fairness Act in his last few days in office, which will increase benefits for 2.8 million government workers and family members.

President Trump has also talked about eliminating Social Security benefit taxes, which would lower taxes for U.S. households by $550, according to a Tax Policy Center analysis. But it’s unclear whether he’ll be able to muster enough support in Congress to do this.

There’s a lot to watch for as we head deeper into 2025. Once we have a more accurate idea of what to expect from the 2026 COLA, you can begin to plan your budget for next year.

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