Cost of living: How to calculate and compare
The cost of living is the amount of money it takes to cover basic expenses.
Just Curious
The cost-of-living adjustment figure for Social Security benefits typically would have been released Oct. 15 under normal circumstances. But the government shutdown triggered a delay.In 2025, more than 72.5 million people saw a 2.5% COLA hike for their Social Security and Supplemental Security Income benefits.
The cost-of-living boost for Social Security beneficiaries will land at 2.8% in 2026, based on new data from a much anticipated but delayed September inflation report released Friday, Oct. 24.
The Social Security Administration confirmed the 2.8% figure via the social media platform X on Friday morning. On average, according to Social Security, retirement benefits will increase by about $56 a month starting in January.
It adds up to $672 a year.
It’s nothing close to the dramatic 8.7% COLA jolt in 2023. But it is better than the increase that beneficiaries saw this year. In 2025, more than 72.5 million people saw a 2.5% COLA hike for their Social Security and Supplemental Security Income benefits.
Many retirees are struggling with higher costs, of course, particularly with medical coverage. Inflation isn’t your friend when your income isn’t growing by much in retirement — or if you’re working, you’re not seeing much in wage gains.
The COLA boost is good but is it good enough?
The COLA boost is slightly better than earlier estimates, even if we’re not talking about a lot of money.
The COLA was projected to be in the 2.6% to 2.9% range in 2026, according to earlier estimates. The Senior Citizens League, a nonpartisan advocacy group, had recently projected 2.7%.
A 2.8% COLA would add up to $56 a month — or $672 a year — for retirees receiving an average benefit of around $2,008 a month for retired workers.
The increase would be slightly less if you looked at the average for all beneficiaries. The average monthly payment, based on August figures, was $1,864.64 for all Social Security beneficiaries.
Many people don’t believe an inflation-adjusted increase in Social Security benefits at or below 3% comes close to what they need to keep up with rising prices.
Only 22% of Americans age 50 and older agree that “a cost-of-living adjustment of right around 3% for Social Security recipients is enough to keep up with rising prices,” according to research conducted by the AARP in September 2025. Some 77% disagreed with that statement or felt the increase was not sufficient.
Most of those surveyed would want something in the 5% range or higher. Interviews were conducted between Sept. 18 and Sept. 23 among 1,001 U.S. adults age 50-plus in the Foresight 50+ Omnibus.
Funded and operated by NORC at the University of Chicago, Foresight 50+ is a probability-based panel designed to be representative of the U.S. household population ages 50 or older. Interviews were conducted online and via phone.
Where is inflation overall?
The Consumer Price Index for All Urban Consumers increased 0.3% on a seasonally adjusted basis in September, after rising 0.4% percent in August, the U.S. Bureau of Labor Statistics reported Friday, Oct. 24.
Over the last 12 months, the all items index increased 3% before seasonal adjustment.
Inflation numbers came in less than expectations; some analysts even called inflation “surprisingly weak.”
Yet, make no mistake, many consumers are paying more than they imagined many times when they pull out their wallets — particularly at the pump in September.
Gas prices jumped by 4.1% month-over-month in September — the largest factor in the CPI’s rise last month. Yet, gas prices were down 0.5% year-over-year.
New vehicle prices were up 0.8% year-over-year in September, while used car and truck prices were up 5.1% year-over-year.
Medical care services were up 3.9% year-over-year in September, based on the newly released data from the Bureau of Labor Statistics.
Why all eyes were on inflation data
The federal government shutdown, which began Oct. 1, disrupted many operations, including those at the U.S. Bureau of Labor Statistics. The last update to the Bureau of Labor Statistics website, prior to the announcement on Oct. 24, was on Oct. 1.
But the agency of the U.S. Labor Department needed to regroup and partially resume operations to calculate the September inflation data, which is essential to determine the Social Security cost-of-living-adjustment for 2026.
Mary Johnson, an independent Social Security and Medicare policy analyst, said the Social Security Administration had to make its COLA announcement by Nov. 1 in order to meet statutory deadlines.
The annual cost-of-living adjustment for Social Security benefits is based on how inflation is running in the third quarter. The formula reflects monthly changes for July, August and September for the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The COLA figure typically would have been released Oct. 15 under normal circumstances.
No other releases will be rescheduled or produced until the resumption of regular government services, according to the Bureau of Labor Statistics.
Why seniors won’t be happy
Higher grocery prices, health care costs and some shocking bills for many services put pressure on everyone’s budget — but especially those with limited incomes and savings.
Johnson, the independent analyst, said seniors may benefit far less from the inflation adjustment in 2026 than in previous years, thanks to rising medical costs overall. She’s concerned that some Medicare Advantage plans could end up imposing costly deductibles.
“I’m personally facing some pretty big Part D plan cost jumps,” Johnson said.
Retirees will run into higher costs for Medicare Part B premiums, which are deducted from Social Security checks.
It’s possible, Johnson said, that seniors might see the biggest jump in Part B premiums — looking at the dollar amount, not percentages — in the history of the program.
The Medicare Trustees report forecast that the 2026 Medicare Part B premium would rise from $185 in 2025 to $206.50 per month in 2026. That would be an increase of $21.50. We don’t have the exact figure yet.
If the actual increase announced later this year is slightly higher, it could beat a $21.60 a month increase that hit in 2022.
A hold harmless provision will ensure that Social Security checks do not decrease, as a result of the Medicare Part B premium increase. The increase in Medicare Part B premiums is limited to the amount of a recipient’s COLA, said Shannon Benton, executive director of the Senior Citizens League, which was established in 1992.
The hike in the Medicare Part B premium would cut into 2026 Social Security benefits for many retirees, meaning how much extra cash they’ll have on hand will be less than the COLA headlines proclaim.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.