For instance, let's hypothetically say the collective price for a large basket of goods and services regularly purchased by retirees increases in price by 3% from one year to the

Recipients of Social Security received an increase in benefits in 2025, as they do every year. However, new economic data and policies could spell trouble.

Social Security’s cost-of-living adjustment is expected to shrink in 2026 and could be the lowest increase seen in a decade.

The cost-of-living adjustment (COLA) applied to Social Security payments in any given year is based on CPI-W inflation from the third quarter of the previous year. In that sense, COLAs are a reimbursement mechanism to compensate retirees for the buying power benefits lost in the previous year.