The new projected Social Security cost-of-living adjustment for 2026 has inched up to 2.7%, slightly higher than a previous projection of 2.4%—which would have been the smallest increase since 2021. While the modest bump is welcome news to seniors dependent on Social Security payments, it might still fall far short of what many need to keep up with their expenses.
For the millions of older adults living on fixed incomes, even a small shift in Social Security expectations can carry big consequences—especially as housing costs continue to rise.
Home insurance premiums are surging across the country, often driven by climate risk and insurer pullouts. Property taxes are placing growing pressure on longtime homeowners in states with rapidly appreciating real estate. And utilities, particularly electricity, are expected to keep climbing through 2026, according to projections from the U.S. Energy Information Administration.
Put simply: While you might see a bigger Social Security check, it might not keep pace with the rising costs of homeownership.
What is the 2026 Social Security COLA?
The cost-of-living adjustment is the annual increase applied to Social Security benefits to help recipients keep pace with inflation. It’s calculated by comparing third-quarter data from the consumer price index for Urban Wage Earners and Clerical Workers (CPI-W) with the same period the previous year. If prices rise, benefits go up. If they don’t, the adjustment could be minimal—or even zero.
For 2026, early estimates had suggested just a 2.4% increase—down slightly from 2.5% in 2025 and significantly lower than the double-digit increases seen earlier in the decade. It would mark the smallest COLA in five years.
But new data about rising inflation has bumped that forecast up to 2.7%.
It’s both good and bad news for seniors: While a larger COLA means more money in their pockets, it also means that the costs of living have gone up. To further complicate matters, inflation rates aren’t spread evenly across sectors. Utilities, for example, are an essential cost of homeownership, yet they have risen at almost double the national inflation rate, according to Utility Dive.
That disconnect leaves older homeowners with a growing gap between what their benefits cover and what it costs to stay in their homes.
The final 2026 COLA will be officially announced by the Social Security Administration in October, once third-quarter inflation data is complete. But for now, the projections are already prompting concern—particularly among retirees whose largest expenses are tied to housing.