The official Coke is still two months away, but inflation data in July led several experts to the same forecast.
Donald Trump defends social security on his 90th anniversary
President Trump celebrated the 90th anniversary of Social Security and has pledged to protect and expand the interests of seniors.
With the growing number of retirees, they rely heavily on Social Security.
In the latest iteration of the annual poll from Gallup, 62% of retirees said Social Security is their primary source of income. That’s up from 60% last year. Another 24% say that monthly benefits are a minor (meaning) source of income during retirement.
For retirees who use Social Security payments as a key factor in their budget planning, few have a greater impact on spending plans than annual living adjustments or COLA. COLA is designed to help Social Security payments keep up with rising costs of goods and services, but many older people have been struggling in recent years as inflation raises almost every price.
There will still be two months before the official COLA in 2026 becomes available, but retirees have received the first data points they need to determine how much they will receive next year. This is the situation right now.
How the government calculates cola
Before diving into the latest data points, it is important to understand exactly how the Social Security Agency (SSA) calculates COLA each year.
Many people know that coke is linked to inflation, but there are very specific measures of inflation used to determine the exact number. This is called the consumer price index for urban wage and administrative workers (CPI-W). The index is calculated monthly by the Bureau of Labor Statistics, based on a national survey of prices taken nationwide. There are over 200 price categories cataloged, each receiving the weights specified in the total index calculation.
To determine COLA, SSA will only look at CPI-W readings for the third quarter (July to September). The average CPI-W increase from these three months over the previous year will be COLA for the following year.
BLS released its July CPI number on August 12th. This is the first data point you will need to decide on your cola for next year. The number of CPIs for August will be announced on September 11th, and the number for September will be announced on October 15th. At that point, all the data needed to calculate the 2026 COLA is available.
This is where the 2026 cola stands now
The July CPI report was lower than expected. The commonly reported CPI-U is 2.7% higher than last year. However, the core CPI, which removes volatile food and gas prices, rose 3.1% year-on-year, exceeding expectations. The higher core CPI count suggests that older people could face great pressure to keep up with rising costs next year.
CPI-W increased 2.5% year-on-year to 316.349. This is an increase of 0.1% over a month.
Using the recent month increase in inflation, modelling the next two months of CPI-W counts, 2026 COLA is about 2.6%. Using the average increase over the last three months, it’s about 2.7%. Both numbers are an increase from 2025 Cola at 2.5%.
There is a good reason to expect inflation to rise over the next two months. Specifically, Trump’s tariffs announced in April are mostly delayed until August. Companies have worked to stockpile inventory prior to tariffs to keep prices low, but ultimately, if you want to maintain profit margins, you need to consider the increased import tax and increase pricing.
The Senior Citizens League estimates that Coke will be at 2.7% next year, up from last month’s estimate of 2.6%. Independent analyst Mary Johnson is also looking forward to COLA next year at 2.7%, in light of the latest CPI-W data. When the Social Security Committee released its annual report in June, its estimate was 2.7%.
As these estimates converge, it is probably the best guess. Data and Trends support 2.7% COLA in 2026. This is something retirees should expect, unless there is no major disruption in pricing over the next eight weeks.
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