Will the Social Security COLA increase account for tariffs? Seniors are worried.

Seniors are bracing for a skimpy increase in their 2026 Social Security benefits, even without all the data that will determine next year’s cost-of-living increase, known as the COLA.

The reason: tariffs.

Half of retirees are “terrified” about the impact of tariffs on their retirement income or savings, and more than 6 in 10 believe rising tariffs will drive inflation beyond what the COLA can cover, according to the new Nationwide Retirement Institute’s Social Security survey .

“Seniors tell us they feel squeezed from all sides, and the uncertainty around tariffs and rising inflation is adding a new layer of financial stress,” Tina Ambrozy, head of strategic customer solutions at Nationwide, told Yahoo Finance.

The 2026 COLA is likely to be 2.7%, according to a recent projection by The Senior Citizens League. That’s a notch above this year’s COLA of 2.5%, which bumped up the average monthly benefit by roughly $50 for retired workers, and applies to more than 70 million retired senior citizens and disabled workers.

The estimate is based on inflation data from the Bureau of Labor Statistics (BLS), which showed consumer prices in July rose 2.7% over the prior year. But prices for items such as shelter, electricity, hospital care, and outpatient medical services — major expenses for millions of seniors — continue to surpass the overall rate of inflation.

Economists are closely watching how President Trump’s wide-reaching tariff regime is affecting consumer prices. So far, inflation has held fairly steady despite levies as high as 50% on imported goods from India. Last month’s hotter-than-expected wholesale price data added to concerns that tariff impacts might have yet to reach consumers.

“Inflation calm is unlikely to last,” Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the latest BLS data. “The late summer and autumn inflation reports, along with business surveys, may reveal further signs of price acceleration, adding to concerns about the inflation outlook.”

How that will reflect in the COLA is unclear at this stage.

The COLA is calculated by averaging inflation data for the third quarter — July, August, and September — based on the Consumer Price Index. The Social Security Administration is expected to announce the actual 2026 COLA in mid-October.

It will come down to timing, should inflation move higher as the tariffs take hold.

Most seniors already felt “the 2025 COLA was too low and that their benefits grow more slowly than inflation,” said Shannon Benton, executive director of the Senior Citizens League. The average retiree’s monthly Social Security benefit is about $2,000.

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“When more than half of recipients say their benefits don’t cover their basic needs and many are already cutting back on both discretionary and essential spending, even modest cost increases can be overwhelming,” Ambrozy said. “This is why so many worry that cost-of-living adjustments won’t be enough to keep pace with inflation.”

The Nationwide data found that 3 in 10 retirees are already relying more heavily on their savings or retirement accounts, and nearly 1 in 5 say it has become more difficult to access or manage their benefits this year.

“You could make the case that tariffs are likely to drive up inflation more than Social Security COLA actually rises or can cover,” said Mary Johnson, a Social Security expert.

“Food costs are likely to continue to climb due to several issues other than tariffs, too, including weather, geopolitical disasters, and lack of farm workers,” she added. “And there is a wild card: There are staff changes at the Bureau of Labor Statistics that could potentially affect the accuracy of consumer data.”

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That said, Social Security checks are inflation-protected, Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, told Yahoo Finance. “Eventually, whatever tariff-related inflation happens will be reflected in Social Security checks, but there’s a lag.”

That’s always been true whether inflation goes up or down during the year.

Tariffs driving up certain prices are “definitely true for important consumer goods like food and clothing,” Romig said, “but that all should be reflected ultimately in the Social Security COLA.”

There are additional red flags, however, to consider. “The other issue is we don’t know what the heck is going on over at the BLS anymore since Trump removed the BLS director,” she said.

“There are some questions about the quality of the data because of the DOGE cuts to staff, too,” she added. “The way they calculate inflation is by going around store-to-store and looking at that market basket of goods and figuring out how much each thing costs in these different areas. They might not have enough people to go and visit all those stores that they normally do.”

In reality, though, that calculation could really go either way. Their estimates could overestimate or underestimate inflation.

“Obviously, the administration has a political incentive to downplay inflation,” Romig said. “Inflation is a very politically salient issue that people get pretty fired up about. That is what is making people pretty nervous.”

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.” Follow her on Bluesky.

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Will the Social Security COLA increase account for tariffs? Seniors are worried.

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