Here is a number worth sitting with: $295.85 a month. That is how much higher the average Social Security check would have to be today for it to buy what it bought in 2016, according to The Senior Citizens League's 2026 analysis of buying power. The group estimates benefits have lost 13.7% of their buying power between 2016 and 2026. If you have been wondering whether Social Security has kept up with inflation, that is one answer, from the people who track it most closely. It has not, at least not for the things retirees actually spend money on.
The gap starts with the index. Every COLA is set by the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers. It measures what working households buy: commuting costs, work clothes, the spending patterns of people with paychecks. Retirees are not working households. They spend a larger share on health care and housing, and health care costs have outpaced overall inflation for years. A COLA can be perfectly accurate for the index and still miss the retiree. Both can be measured correctly. They just measure different lives.
That is also why a big COLA year does not fix it. A raise of 3.6% on a check that already trails your costs by double digits leaves you trailing by slightly less. The 2026 COLA came in at 2.8%, which sounds reasonable against overall inflation near 3.4%, until you remember the check it lands on has been losing ground for a decade. The hole is older than any single raise.
Why Social Security has not kept up with inflation
Two forces do the damage. The first is the index itself. There is an alternative, the CPI-E, an experimental index built around households headed by someone 62 or older. Over long stretches it tends to rise faster than the CPI-W, because it gives health care and housing their proper weight. Switching to it would have produced larger COLAs in most years. Congress has not made the switch, and the proposals to do so have sat still for years.
The second force is quieter. Medicare Part B premiums come straight out of Social Security checks, and they have been climbing. In 2026 the standard premium rose $17.90 a month to $202.90. So when a COLA is announced as a percentage, do the subtraction yourself. A percentage of your check minus a flat-dollar premium increase is the number that actually reaches your bank account. That net figure is the one your budget should use.
I want to be fair to the program here. Social Security is one of the only income sources most retirees have that adjusts for inflation at all. Pensions, annuities, and savings withdrawals mostly sit still while prices move. The complaint is not that the COLA does nothing. It is that the ruler is the wrong shape for the thing being measured.
What you can actually do about the gap
You cannot change the index from your kitchen table, so spend your energy on the parts you control. First, budget the net check, not the announced percentage. When the next COLA is announced, subtract your Part B premium and plan the year on what remains.
Second, attack the costs the index misses. Medicare Part D and Advantage plans change every year, and shopping them during open enrollment is one of the few reliable ways to claw back a few dollars a month. Many states run Medicare Savings Programs that pay Part B premiums for lower-income retirees, and most people who qualify never apply.
My own view: the index fight is worth having, and it is a decade-long fight. Your budget is a this-month fight. Win the one in front of you.
To see the raw material behind this, the historical figures on the free COLA dataset show every COLA since 1975 in one table. Run your own check: compound the raises and compare them against what your own spending did over the same years.
Open the free COLA history tool and CSV download
Frequently asked questions
How much buying power have Social Security benefits lost?
The Senior Citizens League's 2026 analysis estimates benefits lost 13.7% of their buying power between 2016 and 2026. It is an advocacy group's figure, so read it as a measure of retiree sentiment as well as data. The direction is not disputed: retiree costs have risen faster than the COLA index.
Why does Social Security use the CPI-W for the COLA?
Because the law says so. The formula was written when the CPI-W was the standard measure, and changing it requires an act of Congress. The index tracks urban wage earners and clerical workers, which excludes retired households by definition.
What is the CPI-E?
An experimental price index from the Bureau of Labor Statistics that tracks spending by households headed by someone 62 or older. It gives more weight to health care and housing, and over long periods it has tended to rise faster than the CPI-W.
Does the Medicare Part B premium reduce my COLA?
Yes. Part B premiums are deducted directly from Social Security checks, so every premium increase eats part of the raise. In 2026 the standard premium rose $17.90 a month to $202.90.
Can Congress change how the COLA is calculated?
Yes, and bills to switch to the CPI-E get introduced regularly. None has passed. Until one does, the CPI-W formula stands, and retirees should plan around the gap rather than the fix.
Sources: The Senior Citizens League 2026 Loss of Buying Power analysis; Social Security Administration COLA history; Centers for Medicare & Medicaid Services Part B premium announcements. Figures verified October 2026.