President Donald Trump’s recently introduced tariffs may significantly influence the upcoming cost-of-living adjustment (COLA) for Social Security benefits, which will be reflected starting in 2026 based on inflation levels from the previous year.
The recent tariffs, including a 10 percent global tariff and additional reciprocal tariffs on various countries, have generated trade tensions and contributed to rising prices across numerous goods, leading to a general increase in inflation. This economic landscape could mean higher monthly payments for over 70 million Americans reliant on Social Security benefits.
Experts have mixed views regarding the implications of these potential increases. While Trump’s tariffs could elevate the COLA, benefiting some recipients, the reality may not be as favorable for seniors. Michael Ryan, a finance expert, highlighted a significant concern: “The ‘Trump bump’ is the cruelest kind of ‘raise.’ Tariffs are pushing prices up roughly 2.3 percent in the short run, which inflates the COLA seniors get.” He noted that, despite slightly higher checks, the inflation caused by the tariffs diminishes purchasing power even before beneficiaries receive their increased payments.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), calculated during the third quarter of the year, is pivotal in determining the COLA. An announcement detailing next year’s adjustment is typically scheduled for October 15; however, political deadlock between Republicans and Democrats, along with the threat of a government shutdown, may delay the communication of new benefit amounts that affect seniors and disabled individuals.
The Senior Citizens League (TSCL) has projected a COLA increase of between 2.7 and 2.9 percent for 2026, indicating that beneficiaries may soon receive news of this adjustment. Kevin Thompson, CEO of 9i Capital Group, expressed anticipation for this announcement, suggesting that the increase may not be sufficient to counteract the ongoing inflation trends and escalating costs of crucial services like Medicare.
Experts like Thompson and Ryan have expressed concerns about how the higher COLA will also inflate Medicare Part B premiums, reducing the net benefit retirees ultimately receive. Ryan explained that the raise is more akin to a reallocation of funds, emphasizing that it doesn’t represent additional financial security for seniors: “You’re basically watching your left pocket give money to your right pocket while inflation picks both.”
Despite the anticipated COLA increase, it is crucial to understand that it may merely serve to keep pace with rising costs. As Ryan aptly pointed out, “This is far from a windfall. It’s a cost-of-living adjustment, not a cost-of-living advantage. Seniors aren’t getting ahead; they’re barely treading water in choppier seas.” This perspective underscores the ongoing financial challenges faced by many older Americans amid fluctuating economic conditions.