Tariffs being imposed by President Trump are beginning to impact inflation according to data released by the Bureau of Labor Statistics this morning, and that in turn is impacting the forecasts for next year’s Social Security cost of living adjustment (COLA).
Next COLA Update: Social Security COLA Forecast Boosts Slightly to 2.7%
Previous COLA Update: Latest 2026 Social Security COLA Forecasts Match 2025’s Increase
All COLA Updates: Social Security Cost of Living Adjustment (COLA)
Based on today’s numbers from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that is used to determine the annual COLA, Independent Social Security and Medicare policy analyst Mary Johnson boosted her forecast from last month’s 2.5% 2026 COLA prediction to a 2.7% raise.
The Senior Citizens League, which also updates its next-year COLA forecasts monthly based on CPI-W data, predicts Social Security’s 2026 COLA will be 2.6%, up from last month’s prediction of 2.5%. The TSCL model’s prediction has increased for five consecutive months amid mounting inflationary pressures.
Today’s CPI-W update from June data shows consumer prices accelerated last month, rising 2.6% from a year earlier, as tariffs started to leave a bigger imprint on the U.S. economy. For the month, the index increased 0.4% prior to seasonal adjustment.
Johnson noted that Trump administration tariffs are starting to affect the prices consumers pay, causing inflation to rise. But she added that her updated COLA forecast falls within the “average” range, which has been about 2.6% over the past 21 years.
On the other hand, Johnson pointed out that Medicare Part B costs are a very different story, rising several times faster than the average rate of increase in recent years. According to the 2025 Medicare Trustees annual report, which was released in June, the Medicare Part B premium for 2026 is expected to increase from $185.00 in 2025 to $206.50 in 2026, a jump of $21.50 per month or 11.6%.
“That’s the largest Part B increase since 2022 when it rose 14.5%. That will mean a bigger bite comes out of Social Security benefits,” Johnson said, adding that the Social Security Administration automatically deducts the Part B premium cost right off the top of the Social Security benefit of most Medicare recipients.
“It’s not uncommon for Part B premiums to consume much or even all of the annual COLA, leaving little extra to cover other big cost increases,” she said.
Big increases in Medicare Part B premiums, are a burden for anyone, but especially those with the lowest Social Security benefits, Johnson said. If the COLA in 2026 is 2.7%, a Part B premium jump of $21.50 would take the entire COLA of beneficiaries who receive around $800 or less. This is especially the case for all individuals who receive a low Social Security retirement, spousal, or widow/widower’s benefit. “It would be particularly difficult for low-income individuals who may lose the Medicaid coverage that pays their Medicare Part B premiums under the recently enacted One Big Beautiful Bill Act,” Johnson said.
Low-income seniors need more relief
TSCL’s 2025 Senior Survey Report found that about 13% of seniors get by on less than $1,000 a month after taxes and deductions. The research also found that 39% of beneficiaries depend on Social Security for 100% of their income.
“The Big Beautiful Bill is a good start on providing financial relief for American seniors. The next priority should be providing support for the estimated 7.3 million American seniors who are living on less than $1,000 per month, which is below the federal poverty line,” said TSCL Executive Director Shannon Benton.
“TSCL’s research shows that 93% of American seniors see Social Security and Medicare reform as a high priority for Congress and the President. They’re calling on the administration to calculate COLAs with an index more representative of seniors’ experiences and provide a one-time catchup payment to make up for historic COLA shortfalls.”
There have long been calls to change the index from which the COLA is calculated from the CPI-W to the CPI-E to better reflect the true costs incurred by seniors.
TSCL did note in its forecast update today that the “One Big Beautiful Bill” recently signed into law by President Trump will provide seniors who file their taxes individually and earn less than $75,000 with a $6,000 tax credit, and couples who earn $150,000 with a $12,000 credit. Higher earners will receive reduced tax credits.
However, TSCL added that believes the bill does not go far enough when it comes to providing relief for low-income seniors. Social Security benefits aren’t counted as taxable income for about half of beneficiaries, and many seniors’ incomes are too low to see any changes from a tax break.
Official COLA announced in October
It’s important to remember that these 2026 COLA forecasts are preliminary and subject to change, as the official COLA is determined by the Social Security Administration (SSA) each October, based on final cumulative third-quarter CPI-W data. If the average CPI-W reading from the third quarter of 2025 is higher than in 2024, inflation has occurred, and beneficiaries will receive a raise. If it isn’t, there will be no COLA raise for next year—something that occurred in in 2010, 2011 and 2016.
COLAs can vary widely from year to year. While the average COLA raise since 2010 is 2.4%, beneficiaries saw a 41-year high raise of 8.7% in 2023. There was a 3.2% COLA in 2024, and a 2.5% COLA in 2025.
The Social Security Administration is expected to officially announce the 2026 COLA by Oct. 15, 2025.
SEE ALSO:
• 2026 Social Security COLA Forecast Rises Again as Trump Tariffs Fuel Inflation