Is it too soon for retirees to begin thinking about their next Social Security benefits increase? Not necessarily. January 2026 will come before you know it. And mid-October, when the Social Security Administration traditionally announces the amount of the annual cost-of-living adjustment (COLA), will be here even sooner.

Granted, we won't know the exact percentage of the 2026 Social Security increase until SSA's big update seven months from now. However, here's what the next Social Security COLA will be as things stand now.

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How the Social Security COLA is calculated

Before we get to the current estimate of the next Social Security COLA, it might be helpful to understand how the annual adjustment is calculated. The purpose of the COLA is to protect Social Security benefits from being eroded by inflation. Therefore, the most important component in calculating the adjustment is the inflation rate.

There are actually multiple inflation metrics used by economists. The one you'll see mentioned the most is the Consumer Price Index (CPI), the so-called "headline" inflation number. However, that's not the metric used in calculating the Social Security COLA.

Instead, SSA uses another figure -- the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This metric tracks the changes in prices paid by urban wage earners and clerical workers for a basket of goods and services, including clothing, food, housing, transportation, and more. It's calculated monthly by the U.S. Bureau of Labor Statistics (BLS).

The annual Social Security COLA reflects the percentage increase of the average CPI-W in the third quarter of the year from the average CPI-W in the third quarter of the previous year, rounded to the nearest one-tenth of a percent. If the average CPI-W in the current year's Q3 isn't higher than the average from the previous year, Social Security beneficiaries don't receive an adjustment.

The latest COLA projection

It's not the third quarter of 2025 yet, so we don't know what the COLA for 2026 will be. However, The Senior Citizens League (TSCL), a nonpartisan group that advocates for seniors, watches the CPI-W each month and projects what it thinks the next COLA might be.

BLS announced the CPI-W for February last week. TSCL quickly determined that the 2026 COLA would be 2.8% based on the average of the last three months of CPI-W numbers. That's higher than the 2.5% COLA Social Security beneficiaries received this year but 1.1% below the 3.9% average COLA since 2020.

So should retirees expect a COLA in the ballpark of 2.8%? Not so fast. TSCL doesn't only look at the CPI-W for the last three months. The organization uses a statistical model that's more complicated. This model incorporates inflation, interest rate, and unemployment rate in its projections.

After crunching all the numbers, TSCL projected that the 2026 COLA will be 2.2% as things stand right now. This is lower than the 2025 COLA and well below the average increase in recent years.

Why the COLA could be higher than the current estimate

Could the actual COLA for next year be higher than 2.2%? Absolutely. The COLA hinges on what happens with inflation later in 2025.

Some experts predict inflation will rise. For example, Morgan Stanley economists revised their inflation projections upward to 2.5% from 2.3%. Goldman Sachs economists also now forecast inflation will be higher this year than they initially expected. Why? They think President Trump's tariffs and immigration policies could lead to higher prices.

However, inflation (and therefore the next Social Security increase) might instead be lower than anticipated if the political and economic winds change. We won't know for sure what the 2026 COLA will be for several more months. But time passes quickly.