The expectations of millions of retirees have been dashed. The next Social Security adjustment won't be enough. The so-called 2026 COLA falls far short of the actual increase in the cost of living.
The situation isn't new, but it is increasingly alarming. Since 2010, the purchasing power of the payments has dropped by more than 20%. Meanwhile, essential expenses like housing or medical care keep rising without restraint.
Cola doesn't protect retirees
COLA is the cost-of-living adjustment applied to Social Security payments. It's based on the CPI-W, an index that measures workers' spending, not retirees', and that's the problem. For 2026, there will be a 2.6% increase, but housing prices rose 3.9% and medical care 2.8% just in the first half of 2025.
The gap is clear. Retirees allocate a higher percentage of their income to those two sectors. That's why COLA never manages to make up for what it really costs to live.
A system that falls short
The Senior Citizens League warns that Social Security payments have lost 20% of their value since 2010. It's not a minor figure. It's a sign of a system that needs reform.
The lack of accuracy in the data also worsens the outlook. After the hiring freeze in federal agencies, experts believe that CPI-W calculations are becoming less and less reliable.
If the data don't reflect reality, the adjustments will keep being wrong. That means more losses for those who need it most.
The future isn't promising
Less than a third of retirees trust they'll have enough money to live with dignity. Financial insecurity has become part of their lives. There are no signs of improvement.
Some lawmakers propose using a new index, more realistic and in line with the actual spending of older adults. But there aren't any approved reforms yet.
For now, COLA remains a patch. A symbolic adjustment that doesn't solve the underlying problem. That condemns millions of older people to keep losing quality of life.