COLA vs. Inflation vs. Insolvency: The Tug-of-War Over Your Social Security Check
Written by
Chris Adam
Edited by
Jenna Klaverweiden
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2026 is just getting started, but that doesn’t stop some retirees from wondering how well their Social Security checks will hold up this year.
After all, the cost-of-living adjustment (COLA) for 2026 is 2.8%. It’s higher than the 2.5% that came in 2025, but it’s likely not close to enough to erase financial concerns for seniors. With that in mind, here’s a look at how Social Security’s COLA stacks up to inflation.
COLA and Inflation
When seniors ask the very basic question of whether the COLA is outpacing inflation so far this year, the answer is yes. COLAs are tied to changes in the consumer price index for urban wage earners and clerical workers (CPI-W).
As reported by The Motley Fool, the CPI-W increased 2.6% on an annual basis in December. Based on that, it looks like the 2026 COLA is outpacing inflation. Still, tariffs hanging in the balance mean lots of uncertainty surrounding inflation for this new year, per The Motley Fool.
Despite the COLA outpacing inflation for now, there are still some concerns about how far a Social Security check can actually go for retirees.
“No one will argue that for what working Americans put into Social Security, they get far too little out of it, especially when you compare it to retirement investment opportunities,” said Melanie Musson, a finance expert with Quote.com. “Anyone retiring on Social Security alone will have to live a frugal lifestyle.”
“Maybe with senior citizens they should measure inflation by healthcare cost inflation, which is usually the largest expense for senior citizens and may provide a more accurate reflection of the prices they face,” said Marcus Sturdivant Sr., managing member of The ABC Squared.
The Future of Social Security
Here’s something else on the minds of many who receive Social Security checks — the future of the program. According to Brookings, some are projecting that Social Security funds will be “exhausted” by 2032.
“The Social Security Administration is limited in what it can do because it’s facing insolvency,” Musson said. “As the retirement age increases, they attempt to stabilize their finances, but they can only raise it so much before the program provides no benefit to retirees.”
A Suggested Action Plan
Andrew Lokenauth from Fluent in Finance suggested a three-part action plan.
“First, treat Social Security as a baseline, not your entire income strategy,” he said. “Build a $5,000 to $10,000 emergency fund if possible. Second, consider a part-time gig bringing in $500 to $800 monthly. Third, cut one major expense category such as cable, dining out or subscriptions, by 20%.”
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