The Annual Raise Everyone Watches
If you depend on Social Security to help pay your bills, you’re probably keeping an eye out for the annual Cost-of-Living Adjustment (COLA) announcement. It’s the one time each year when benefits may increase to keep up with inflation — and the 2026 adjustment is shaping up to be an unusual one.
Some analysts are calling it a “Trump bump” due to President Donald Trump’s tariff policies.
What’s a COLA, and How Does It Work?
Each year, the Social Security Administration calculates the COLA based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index measures how much everyday prices for things like groceries, gas, utilities, and rent have changed over the past year.
If prices go up, so do Social Security benefits. It’s designed to protect retirees’ purchasing power from being eaten away by inflation.
For 2026, experts expect the COLA to be 2.7% to 2.8%, which would add roughly $54 to $56 per month.
Why the “Trump Bump”?
President Trump recently introduced new tariffs — taxes on goods imported from other countries. These tariffs make imported products more expensive, which often pushes up prices for U.S. goods as well.
Higher prices equal higher inflation — and since COLA is tied directly to inflation, Social Security benefits are expected to rise slightly more than they otherwise would. That’s what experts mean by the “Trump bump.”
But There’s a Catch
Unfortunately, retirees may not feel much benefit. That’s because Medicare Part B premiums (which cover doctor visits and outpatient care) are projected to increase about 11.5% (AARP, Kiplinger) in 2026, to roughly $206 per month.
For many retirees, those premiums are deducted straight from their Social Security checks, which means most of the raise could vanish before it even arrives.
In other words, you might see your Social Security payment go up a little — only to see Medicare take a bigger bite out of it.
Why Retirees Still Lose Ground
Another ongoing issue is how the COLA is calculated. The CPI-W measures inflation based on what working adults spend money on, not retirees.
Since older Americans spend more on healthcare and housing, the current formula doesn’t truly reflect their cost of living. That’s why, even after COLA increases, many seniors feel like their money doesn’t go as far as it used to.
The Bottom Line
The 2026 “Trump bump” will likely provide Social Security recipients with a modest raise, but with rising healthcare costs and outdated inflation measures, retirees will still face financial challenges.
That’s why it’s more important than ever to diversify your income, even in retirement.
Retiree Income Tip Box: 3 Ways to Offset Shrinking Social Security Buying Power
- Start a Small Online Business
Affiliate marketing is one of the simplest, lowest-risk ways to earn from home. You don’t need products, inventory, or customer service — just a willingness to learn how to connect people with the products they already want. I personally use and recommend Wealthy Affiliate, a step-by-step training platform for beginners and retirees alike. - Monetize Your Experience
Retirees have decades of knowledge to share. Whether it’s gardening, travel, or DIY repairs, starting a blog or YouTube channel can turn your expertise into consistent, long-term income. - Trim Recurring Costs
Review subscriptions, insurance, and even grocery bills. Every $20 you save each month compounds over time — especially when paired with new income sources.
Final Thought
Relying on Social Security alone has never been harder. The 2026 COLA may give retirees a small bump, but with inflation and healthcare costs rising, the real power lies in creating your own backup income stream.
You don’t have to be tech-savvy or young — you just need the right training and support.
Please let me know how I can assist you.
Dave
Yourturnmarketing.com