“This estimate may rise with four more months of data still to come in before the 2026 COLA will be announced in October,” Johnson said.<\/p>\n
Even though May inflation remained tame, most economists predict Trump’s tariffs will raise inflation<\/a>, which in turn, boosts the COLA.<\/p>\n “Another month goes by with little evidence of tariffs, but the longer-term inflation challenge they pose remains,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.<\/p>\n Ken Kim, senior economist at KPMG, sees inflation peaking above 4% annually in the fall.<\/p>\n That would be sharply higher than the 2.4% annual increase in the May consumer price index<\/a>, a measure of average changes in goods and services costs.<\/p>\n The average monthly Social Security check in May reached a record high $1,948.17. Based on that, a 2.5% increase would raise the monthly benefit by about $40.70.<\/p>\n Roughly 75 million Americans, or about a fifth of the population, receive Social Security benefits.<\/p>\n COLA is an annual adjustment to benefits meant to keep beneficiaries\u2019 purchasing power from being eroded by inflation.\u00a0 The final COLA for the following year is typically announced in October by the Social Security Administration.<\/p>\n COLA is based on the percentage increase in the consumer price index for Urban Wage Earners and Clerical Workers from July through September of the last year as compared to the same three months of the current year. CPI-W tracks the overall inflation rate but can differ slightly.<\/p>\n In May, annual CPI-W rose 2.2%, compared with the 2.4% rise in overall consumer prices.<\/p>\n Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at\u00a0mjlee@usatoday.com<\/a>\u00a0and\u00a0\u00a0subscribe to our free Daily Money newsletter<\/a>\u00a0for personal finance tips and business news every Monday through Friday morning.\u00a0<\/p>\n On average, a retiree could see an extra $150 a month — if there’s a 9% cost of living adjustment to Social Security for 2023 — on top of current benefits at $1,656 a month. That would be an additonal $1,800 a year. Xxx Img Social Security 1 1 Av112ud9i Jpg <\/p>\n