Social Security COLA Isn’t Enough To Live On

Social Security COLA Isn’t Enough To Live On

Douglas A. McIntyre

Mon, September 14, 2026 at 7:36 PM GMT+3 3 min read

Quick Read

• The projected 3.6% COLA will likely fall short as record diesel prices drive up food and freight costs, hitting low-income retirees hardest.

• Fourteen percent of retirees depend on Social Security for 90% or more of their income, and a 79% payout cut could push millions into poverty.

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Next year's Social Security cost-of-living increase looks like it will be 3.6%. The AARP made this forecast. The real figure will be released on October 14. It is based, according to The New York Times, on "the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. It averages the figures for July, August, and September. That may be fine for people who have a lot of money. For those who don't, it's a problem.

Most of the conversation about Social Security is that it will "run out of money".That happens in late 2032. It really doesn't run out. The payout drops to about 79% of the current total.

People choose one of three options. Social Security defines them as "early eligibility," which can start at 62. "Retirement" age is 65. People can get the largest payout possible if they wait until age 70.

Analysts have proposed several ways to "save" Social Security. Among those is to add two years to three retirement options. Another is to raise the wage level cap when people pay in. Today, for most people, that is $184,500 a year. The most controversial idea is that people who make a great deal of money after they retire should pay little, or nothing.

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Is 3.6% enough? Almost certainly not. Over the next year, the CPI could surge. Energy prices will be a factor. So will food. And food prices are affected by energy prices. Seventy percent of all Us freight is moved by truck. Diesel is at its highest price ever. Some of that will be passed on to consumers next year.

The 3.6% COLA hits the low-income recipients hardest. Fourteen percent of people who have retired rely on 90% or more of their retirement income, according to Investopedia. If Social Security payments do drop to 79% of current total, many of these people will be driven close to the poverty level or below it. The Center on Budget and Policy Priorities reports, "Without Social Security, 23.5 million more adults and children in the United States (including Puerto Rico) would be below the poverty line, according to our analysis of survey data for 2024 using the official poverty measure (OPM)."

Is 3.6% enough for many people? Not if the price of energy and food skyrockets.

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