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Inflation Is Cooling Off. Does This Mean a Lower Social Security COLA in 2026?
If you haven't seen the latest inflation data, the general idea is that prices are rising more slowly than expected.We recently got a look at consumer price index (CPI) data for April, and the year-over-year inflation rate was 2.3%. Not only is this the lowest inflation figure since early 2021, but it was one-tenth of a percentage point lower than economists had expected. The core CPI, which excludes food and energy prices, matched annual estimates with a 2.8% increase, but the monthly rise was lower than expected. This is a little lower than the latest projection for the 2026 Social Security cost-of-living adjustment, or COLA, from the Senior Citizens League (not a government organization). Its latest estimate calls for a 2.4% COLA next year, which is slightly less than the 2.5% seniors received in 2025. But if inflation has been declining so far in 2025, couldn't the trend continue? With the Social Security COLA based solely on third-quarter inflation data, a continued decline in inflation could certainly have COLA implications. Continue reading
If you haven't seen the latest inflation data, the general idea is that prices are rising more slowly than expected.
We recently got a look at consumer price index (CPI) data for April, and the year-over-year inflation rate was 2.3%. Not only is this the lowest inflation figure since early 2021, but it was one-tenth of a percentage point lower than economists had expected. The core CPI, which excludes food and energy prices, matched annual estimates with a 2.8% increase, but the monthly rise was lower than expected.
This is a little lower than the latest projection for the 2026 Social Security cost-of-living adjustment, or COLA, from the Senior Citizens League (not a government organization). Its latest estimate calls for a 2.4% COLA next year, which is slightly less than the 2.5% seniors received in 2025. But if inflation has been declining so far in 2025, couldn't the trend continue? With the Social Security COLA based solely on third-quarter inflation data, a continued decline in inflation could certainly have COLA implications.
