Each year, retirees wait for news from the Social Security Administration like it’s a weather forecast: hoping for sunshine, bracing for clouds. This year, that forecast calls for a 2.8% cost-of-living adjustment (COLA) in 2026. For someone collecting the average benefit of $2,008 a month, that’s an extra $56 — barely enough to cover a tank of gas and a pizza night.
But here’s the thing: 77% of Americans age 50 and older say it’s not enough. And frankly, they’re right.
Why It Feels Like You’re Falling Behind
The COLA is calculated using a version of the Consumer Price Index that’s based on urban wage earners, not retirees. In other words, it doesn’t really reflect the spending patterns of someone whose biggest expenses might be healthcare, housing, or groceries instead of commuting costs or office lunches.
According to an AARP survey, most older adults say they’d need at least a 5% increase to keep up. One in four say 8% would be more like it. So yes, even though there’s a bump coming, it’s no match for the quiet creep of inflation that eats away at purchasing power year after year.
What Can You Do?
We talk a lot at Mediate Financial about taking control of what you can control. And while you can’t change how the government calculates COLAs, you can build a retirement strategy that cushions you from their limitations.
Here’s where to start:
1. Consider if Delaying When You Claim Benefits Makes Sense
Waiting to take Social Security until age 70 increases your monthly benefit by about 8% for every year past your full retirement age. That’s a permanent increase that compounds over time — future COLAs will be applied to that higher number, too.
2. Diversify Your Income
Relying solely on Social Security is like relying on one fishing line in a wide-open sea. Instead, aim to build a portfolio that includes things like IRAs, 401(k)s, taxable investments, and maybe even part-time income or rental streams if those are options. As a general rule of thumb – which we of course try to avoid, as everyone is different, but for the sake of this article – financial planners often suggest aiming for 70-80% of your pre-retirement income to maintain your lifestyle. Social Security usually covers less than half of that.
3. Cut the Big Stuff Early
One of the smartest moves we see clients make? Entering retirement without a mortgage. Housing is often your largest fixed expense, and eliminating it can give you flexibility when costs elsewhere rise.
4. Keep Debt in Check
Inflation is hard enough without high-interest debt tagging along. Knock it out before it can follow you into retirement. Budgeting tools and debt paydown strategies can free up cash flow and reduce financial anxiety.
5. Tap Into Community Resources
From property tax relief to utility assistance and prescription programs, many states and cities offer senior-specific support. Don’t leave help on the table just because it takes a little digging.
The Bottom Line
The COLA boost for 2026 is better than nothing, but for most retirees, it’s not enough. And while we can’t promise Washington will change the formula anytime soon, we can promise this: the clearer your retirement income strategy, the more power you have to ride out whatever comes next.
That’s what the Clear View Retirement Process is all about: helping you see beyond the headlines and inflation numbers, and into a future that’s actually livable.
We are an independent firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.