American seniors are frustrated with how Social Security adjusts for inflation, and they want change.
A new report from The Senior Citizens League (TSCL) shows a clear demand among retirees to improve the way the annual cost-of-living adjustment (COLA) is calculated. According to the group’s latest survey of 1,92 individuals over the age of 62, 34 percent of respondents identified updating the COLA formula as their top policy priority for enhancing Social Security benefits.
And when presented with specific policy options to raise future COLAs, seniors overwhelmingly supported a shift to a more targeted inflation measure.
Currently, the Social Security Administration (SSA) calculates COLA based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks inflation using the spending habits of younger, urban workers, not retirees. Since 1975, COLAs have been applied annually based on CPI-W data gathered during the third quarter of the year (July through September), with the goal of ensuring benefits rise in line with everyday costs, such as housing, food, and medical care.
This year, benefits rose by 2.5 percent. The TSCL, based on current CPI-W readings, expects the 2026 COLA to increase slightly to 2.6 percent. However, regardless of the boost, for many retirees, that formula no longer works.
According to the TSCL survey, 68 percent of seniors support replacing the current CPI-W model with the CPI-E, or Consumer Price Index for the Elderly. Developed by the U.S. Bureau of Labor Statistics, the CPI-E is an index that tracks the spending habits of Americans aged 62 and older, focusing on the types of goods and services seniors typically use, such as health care, housing, and prescription drugs.
“CPI-E is designed to better reflect the spending habits of people aged 62 and older,” Colin Ruggiero, co-founder at DisabilityGuidance.org, told Newsweek. “It gives more weight to health care and housing costs which are two of the fastest-growing expenses for seniors. Switching to CPI-E would make COLAs more relevant and responsive to the real financial pressures seniors face.”
Chris Motola, a financial analyst at NationalBusinessCapital.com, told Newsweek: “The main advantage of CPI-E would be to more heavily weight health care and housing costs in COLA calculations, both of which tend to disproportionately eat into seniors’ budgets.”
Another popular idea is making up for what’s already been lost.
The TSCL survey found that 57 percent of respondents support a one-time “catch-up” COLA payment to compensate for years when benefits failed to keep pace with actual living costs.
Composite image created by Newsweek.
Composite image created by Newsweek.
Photo-illustration by Newsweek/Getty/Canva
“A catch-up COLA would be a recognition that past adjustments haven’t kept pace with reality,” Ruggiero said. “While it’s feasible, it would require congressional approval and carry a hefty budgetary cost. Politically, it could gain traction as a way to restore fairness, especially if framed as a correction rather than a new ongoing expense.”
Still, the limits of these proposals are clear. While COLA reforms could help stabilize seniors’ purchasing power, experts caution that they won’t fix everything.
“Adjusting the COLA is a great start, but it’s not the cure-all,” said Ruggiero. “We also need broader reforms to strengthen the entire retirement system, including benefit adequacy, solvency, and support for low-income seniors.”
Motola agreed: “It would go a long way, but again, a major problem is that Social Security isn’t really meant to carry the burden alone. We’ve made it very difficult for people to save money for retirement, and the loss of pensions has placed enormous stress on the system.”