What could happen to future benefit increases?

While the COLA for 2026 is projected at around 2.7%, future benefit increases may not keep up with the rising costs of housing, healthcare, and everyday expenses. Because COLA is tied to inflation, lower inflation years mean smaller benefit increases — even as retirees face rising mortgage payments, insurance premiums, and medical bills.

Some policymakers have suggested updating the formula used to calculate COLA to better reflect seniors’ spending, particularly on healthcare. Others argue that without reform, Social Security’s long-term financial health may require adjustments to benefits, payroll taxes, or eligibility rules.

For retirees and those in retirement planning, this means Social Security should be seen as just one piece of income. Balancing it with IRA accounts, 401(k) savings, credit management, and insurance planning is critical to protect your financial future.