Cola Social Security Forecasts have come out – how are they compared to recent years?

In order to keep up with rising prices, social security applies an annual cost of living costs (Cola), which enters into force in January each year.

The League for Elderly Citizens (TSCL), a non -profit organization that is advocating for higher rights, publishes COLA assessments based on inflation data. In its latest forecast, issued on June 11, TSCL predicts 2.5% Cola in 2026 – the same as 2025, but below the average of 3.4% since 1975.

The official Cola will not be announced by the Social Security Administration (SSA) until October, but it is worth paying attention to the evaluations, so that current and soon forthcoming retirees can start planning their finances accordingly.

In order to determine the percentage of COLA’s determination of each year, social security considers the consumer prices index for employees of urban salaries (CPI-W).

CPI-W is a measure of inflation published monthly by the Bureau of Labor Statistics (BLS). He examines the prices of total costs, such as housing, food, transport and medical care. Here are the steps that follow social security to calculate Cola:

1. On average, CPI-W data for the third quarter (July, August and September) of the current year.

2. Compare the average for the current year with the average of the previous year.

3. If increased, adjust Cola to match the percentage increase; If it is reduced or remains, there is no car.

For example, if the average CPI-W from the current year is 3% higher than the previous year, Cola will enter next year will be set at 3%.

Although social security retirement benefits began in 1940, the annual car was not something until 1975. Since then, the average annual COLA has been 3.4%, but the amounts ranged significantly. The highest car was once in 1980, 14.3%. The most Colas were in 2010, 2011 and 2016, when there was no increase in benefits. Here are the last 10 Colas:

Data Source: SSA.

The annual Cola is evaluated, but has not always been up to date with inflation to cancel it wisely. According to TSCL, the purchasing power of social security benefits has decreased by 20% since 2010. This means that benefits for $ 1 would then cost about $ 0.80 now. It’s not perfect.