Key Points
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Inflation has regained momentum since President Trump started imposing tariffs earlier this year.
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The Senior Citizens League has raised its forecast for Social Security’s 2026 COLA for five straight months.
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The latest forecast says benefits will increase 2.7%, which means an extra $54 per month for the average retiree.
Tariffs imposed by President Trump have increased the average tax on U.S. imports to its highest level since 1941, according to the Tax Foundation. Inflation had been cooling, but price increases across the economy picked up steam after Trump imposed a 10% baseline tariff on most countries in early April.
The Social Security Administration will announce the 2026 cost-of-living adjustment (COLA) in October, but retired workers are on pace to get a “Trump bump.” In other words, benefits will increase more substantially next year than they otherwise would have, had the president not made stark changes to U.S. trade policy.
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Here’s what Social Security beneficiaries should know.
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Social Security’s 2026 COLA is on pace to get a “Trump bump” due to tariffs
Social Security recipients receive an annual cost-of-living adjustment (COLA) to ensure benefits increase at the same pace as prices across the economy. Specifically, COLAs are calculated as the percent increase in the CPI-W (a subset of the Consumer Price Index) in the third quarter of each year, which refers to the three-month period from July to September.
For example, the CPI-W increased 2.5% in the third quarter last year, so Social Security benefits got a 2.5% COLA this year. However, the 2026 COLA is on track to be more substantial because CPI-W inflation regained momentum once President Trump started imposing tariffs earlier this year, accelerating from 2.1% in April to 2.5% in July.
“Placing broad-based tariffs on goods from numerous countries could have a profoundly negative impact on the daily lives of seniors,” said Shannon Benton, executive director at The Senior Citizens League (TSCL). “Along with most economists, TSCL expects the new tariffs to lead to higher inflation.”
As a result, TSCL — the nation’s largest nonprofit advocacy group for senior citizens — has raised its 2026 COLA forecast for five consecutive months, from 2.2% in March to 2.7% in August. In other words, President Trump’s tariffs could result in a COLA that is half a percentage point higher than it otherwise would have been.
That “Trump bump” is bad news for two reasons. First, COLAs reimburse beneficiaries for the purchasing power Social Security lost in the previous year, which means retirees may struggle in the remaining months of 2025 as inflationary pressure intensifies. Second, the 2026 COLA is based on CPI-W readings between July and September, meaning the pay raise would be too small if inflation continues to trend higher beyond that point.
Here’s what the 2026 COLA forecast means for Social Security beneficiaries
The Social Security Administration will announce the official 2026 COLA after the Bureau of Labor Statistics announces September CPI-W data on Oct. 15. As mentioned, TSCL’s latest forecast says benefits will increase 2.7%. The Social Security Board of Trustees gave an identical estimate earlier this year.
The chart shows the average Social Security benefit for retirees, spouses, survivors, and workers with disabilities in July 2025. It also shows how much the average monthly payout would increase after a hypothetical 2.7% COLA in 2026.
|
Beneficiary Type |
Average Benefit Before 2.7% COLA |
Average Benefit After 2.7% COLA |
Increase in Monthly Benefit |
|---|---|---|---|
|
Retired workers |
$2,007 |
$2,061 |
$54 |
|
Spouses |
$954 |
$980 |
$26 |
|
Survivors |
$1,574 |
$1,617 |
$43 |
|
Workers with disabilities |
$1,582 |
$1,625 |
$43 |
Data source: Social Security Administration. Average benefits before the hypothetical 2.7% COLA reflects the average payments made in July 2025.
As shown, the average retired worker would receive about $54 more each month (or an additional $648 for the full year) if Social Security benefits increase 2.7% in 2026. But if the tariffs continue to push inflation higher after September, that will not be reflected in the 2026 COLA, in which case retirees may feel like they actually have a little less money next year.
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