2026 Social Security COLA Projection

What is the projection for 2026 Social Security COLA?

I’m projecting 2026 Social Security COLA at 3.1%, which is increase over 2025 Social Security COLA.

Watch this video to see how I determined that projection:

What is the 2025 Social Security COLA?

The 2025 Social Security COLA is 2.5%.

This matches the 20 year average of past Social Security Cost of Living Adjustments.

Watch this video for the official 2025 Social Security COLA increase and how Cost Of Living Adjustments are determined.

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How is the 2025 Social Security COLA determined?

Social Security COLA is determined by a measure of inflation called CPI-W which is less widely reported than CPI-U.

For 2025, Social Security will look at the average CPI-W from the 3^rd quarter of 2024 and compare it to the 3^rd quarter of 2023 numbers.

How to project the 2026 Social Security COLA increase

With the latest CPI release we now have 7 of the 12 monthly numbers that go into the 2025 Social Security COLA calculation year.

2024Q3 CPI-W Average: 308.729
February 2025 CPI-W: 312.460
Marcy 2025 CPI-W: 313.25
April CPI-W: 314.243
3-month CPI-W Average: 313.318

313.318/308.729 = 1.38% (non-annualized)
On average (10-year historical) the next 5 months of COLA data is projected to be .34% higher than the previous 7 months.

1st 7 months = 1.38%
2nd 5 months projected at 1.73%

2026 Social Security COLA projection = 1.0138 * 1.0173 – 1 = 3.14%, which gets rounded down

I’m projecting 2026 Social Security COLA at 3.1%.

What was the 2024 Social Security COLA?

2024 Social Security COLA was 3.2%. For more information on Social Security Cost of Living Adjustments, including past COLA increases visit https://www.ssa.gov/cola/.

Why is the 2025 COLA so much lower than 2022 & 2023?

While 2025 COLA is lower than 2022 at 5.9% and 2023 at 8.7%, remember that COLA is directly tied to inflation. The only reason COLA was so high in 2022 & 2023 is because inflation was so high in 2021 & 2022. Prior to 2022 the 30-year COLA average was 2.4%, so hopefully this new COLA for 2025 of 2.5% is a sign that inflation is returning to ‘normal.’

What can I do to combat the lower Social Security COLA in 2025?

One bright spot for those on a fixed income is that interest rates are much higher. If you’re not getting over 4% on your savings or CDs then you need to find better banks to work with!

Here’s how to get more interest on your bank money.

If inflation is slowing, and you’re preparing for the year ahead you may consider moving some money into 1-2 year CDs so that you can be sure of the interest you’re getting on your money in 2024 and 2025. And right now those CDs are paying much higher than the projected COLA!

Another option could be Treasury Bills. Right now they are paying higher interest than most similar bank accounts. Here’s how to get more interest from Treasury Bills through your Treasury Direct account.

You could also consider increasing your Social Security, by deferring your Social Security.

If you are between your Full Retirement Age and 70 you could write Social Security to ask them to defer your payments. You could wait all the way to 70, but if you defer for just 1 year you would get an 8% higher payout! That beats any bank account you could find.

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