2025 Inflation Rate Lowest Since 2020 as Average 2026 Social Security Checks Top $2K
Today, the Bureau of Labor Statistics revealed that the annual inflation rate for the U.S. in 2025 was officially 2.7% according to the Consumer Price Index, marking a slowdown from 2024’s 2.9% and reaching the lowest point since 2020.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—the index used to calculate annual Social Security cost of living adjustments (COLAs)—increased 2.6% in 2025, higher than the 2025 Social Security COLA raise of 2.5% but lower than the 2026 COLA increase of 2.8%.
The news comes as America’s roughly 71 million Social Security beneficiaries are expecting their monthly payments this week that will top $2,000 on average.
The average Social Security beneficiary is receiving $2,015.07 from the program this month thanks to the 2026 cost-of-living adjustment (COLA) increasing by 2.8% for 2026. That’s up from $1,960.18 in November 2025, the last month with data available.
With the new average monthly benefit topping $2,000, the average beneficiary will receive more than $24,000 in Social Security income this year.
“Seeing the average Social Security retirement benefit cross $2,000 is a big milestone, but one that we’re witnessing far too late,” said TSCL Executive Director Shannon Benton. “The reality is that seniors consistently tell us that they see their benefits falling further behind inflation every year, as their quality of life degrades.”
TSCL’s 2025 Retirement Survey, with a Census-weighted sample of 1,359 Americans over the age of 65, found that over half (53%) of seniors believe their income won’t cover essential goods and services, while 58% worry inflation will push them to raise spending and deplete their savings.
TSCL’s research consistently finds that most seniors believe the annual COLA increases fall short more often than not. For example, when TSCL asked seniors to estimate the annual inflation rate from the prior year in its 2025 Senior Survey, 80% estimated it was 3% or higher (the CPI-W annual inflation rate for 2024 was officially 2.9%). The 2025 COLA was just 2.5%.
TSCL’s 2025 Retirement Survey estimates that 28.2% of U.S. seniors, or about 15.7 million Americans over the age of 65, do not have enough income to cover essentials such as food, transportation, and housing. Meanwhile, 52.4% (or another 29.2 million) can afford to get by for now, but don’t feel confident about their ability to do so in the future.
“According to our research, four in five seniors are either already struggling to pay for basics like rent and food or are living from benefits check to benefits check. Nearly 60% have skipped at least one medical service in the last year because they couldn’t afford it. About 20% rely on food stamps,” TSCL’s Benton added. “As a country, we need to question why we’re letting our elders slip into poverty while we sit and watch, especially when the Social Security Office of the Chief Actuary has already identified several proposals that would change the tax code to strengthen today’s benefits and extend Social Security’s solvency by a generation.”
Early 2027 COLA projection
Based on today’s latest CPI-W data for December 2025 from BLS, The Senior Citizens League predicts Social Security’s 2027 COLA will be 2.5%, which would be 0.3% lower than this year’s 2.8% COLA. This year’s COLA raised monthly Social Security checks by an average of about $56 per month, beginning this month.
But because Medicare Part B premiums are automatically deducted each month, about one-third of this year’s COLA increase will be eroded, as standard monthly premium for Medicare Part B rose by $17.90 for 2026.
SEE ALSO:
• It’s Official: Social Security COLA Set at 2.8%
• 2026 Medicare Part B Increase to Eat Up Much of Social Security COLA Raise
• New Bill Targets Social Security COLA Formula
• Inflation, Saving for Retirement Among Top Financial Fears
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.