After a delay that lasted more than a week, the Social Security Administration was finally able to share an official 2026 COLA announcement with the public on Oct. 24. Next year, seniors on Social Security will see their benefits increase by 2.8%.

If you’re disappointed in that raise, you’re not alone. In a Motley Fool survey of retirees, 54% of respondents said a 2.8% COLA is not enough. And 68% said they’re not expecting their upcoming COLA to do much for their finances.

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It’s natural to be bummed that your upcoming Social Security COLA isn’t as large as you may have hoped. But in a way, a smaller COLA is not a bad thing at all.

A less generous COLA means less rampant inflation

While a 2.8% Social Security COLA isn’t exactly record breaking, it’s worth noting that 2026’s raise is coming in higher than 2025’s, when seniors only saw a 2.5% COLA.

Still, the average Social Security recipient getting retirement benefits collects a little more than $2,000 a month. So a 2.8% COLA means only getting a boost of about $56 per month. And that doesn’t account for the fact that rising Medicare premiums could eat away at a large chunk of that.

But the main reason you shouldn’t be disappointed in a 2.8% COLA is that it’s a sign that inflation did not pick up so much in 2025. Social Security COLAs are tied to inflation directly. So a smaller raise is indicative of less rampant inflation.

Or, to put it another way, a larger Social Security COLA would no doubt come at the cost of higher prices everywhere. So what you would gain in one regard, you’d lose in another.

The fact that inflation held pretty steady during the third quarter of 2025, which is what the upcoming COLA is based on, is also a good thing seeing as how tariffs had the potential to drive costs up to unaffordable levels. It’s still too soon to assess the full impact of tariffs. But so far, it’s clear that their impact has not been too extreme.

Be realistic about your Social Security COLA

It’s understandable that you’d want a larger Social Security raise than a smaller one. But it’s also important to be realistic about COLAs can and cannot do.

Social Security COLAs are designed to help benefits keep up with inflation. But they’re not meant to help benefits outpace inflation.

Furthermore, if the bulk of your retirement income comes from Social Security, and you don’t have savings to fall back on, you can’t expect your COLA to do too much for you in any given year. In a situation like that, you may need to look at ways to generate additional retirement income, whether it’s working part-time or renting out a room in your home.

Reducing expenses is another avenue to explore if you’re worried your 2026 COLA won’t cut it. But all told, next year’s COLA is not particularly stingy in the context of Social Security raises. If you’re unhappy about it, you may need to reset your own expectations.

That said, there is a flaw in the way Social Security COLAs are calculated. They’re based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers which, as the name clearly implies, is not an index that’s specific to the costs Social Security recipients tend to face.

Advocates have been pushing for a better way to calculate COLAs so they’re able to do Social Security beneficiaries more good. But lawmakers have another Social Security problem to solve first — preventing benefit cuts.

So in the near term, it’s unlikely that Social Security’s COLA formula will change. That means you’ll need to accept that those raises may not result in much more buying power from year to year — and plan around that.

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