Social Security's 2026 COLA Projection: More Than a Number, It's a Sign of What's Coming

The number has been announced: 2.8 percent.

For the 71 million Americans who rely on Social Security, this is the magic number for 2026. It arrives not with a bang, but with a quiet digital update in a MySSA portal or a thin letter in the mail. For the average retiree, it translates to about $54 more a month. Fifty-four dollars. Enough for a few extra bags of groceries, maybe a single tank of gas, or a couple of co-pays.

When I first saw the final figure, after all the delays caused by a government shutdown, I didn't think about the economics or the policy. I thought about the user experience. Imagine you’re a user of a critical, life-sustaining service—one you’ve paid into your entire working life. You log in to see your annual update, and the system informs you that your resources will increase by a fraction of what your daily expenses already have. You’re told the system is working as intended.

But is it? We’re so caught up in the political debate around Social Security’s solvency that we’re missing the more immediate, and frankly more solvable, problem. This isn't just about money; it's about the very design of the system we’ve built to care for our elders. And right now, that system is running on tragically outdated code.

The Ghost in the Machine

The core of the problem lies in the algorithm used to calculate the Cost-of-Living Adjustment, or COLA. For decades, the government has used a metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is the historical equivalent of trying to run a modern AI on a computer from the 1980s—it technically works, but the output is fundamentally misaligned with the reality it’s supposed to reflect.

The CPI-W tracks the spending habits of working people in cities. But who are the primary users of Social Security? Retirees. Their spending patterns are vastly different. They spend a much larger percentage of their income on healthcare and housing, two sectors where inflation has been relentless. The Senior Citizens League, a nonpartisan advocacy group, has been shouting this from the rooftops for years. Their research is stark: a staggering 94 percent of seniors felt the 2025 COLA was too low.

There’s a better metric. It’s called the CPI-E, the Consumer Price Index for the Elderly. It’s designed specifically to measure the costs that actually affect seniors. In simpler terms, it tracks the right basket of goods. And according to analyses, it would have resulted in a higher COLA about 69 percent of the time. When I dug into this, I was honestly floored. This isn't a mystery hidden in some arcane economic formula; it's a fundamental design flaw, a known bug in the system that we've simply chosen not to patch for decades.

Why haven't we made the switch? The reasons are complex, mired in political inertia and budget scoring. But from a design and technology perspective, it’s an epic failure. We have the data. We have a superior metric. Yet we continue to run a legacy system that we know is failing its users. It’s like a software company knowing a critical bug is crashing their app for their most loyal customers and deciding, year after year, that fixing it just isn't a priority. What does that say about how much we value those users?

A System at War With Its Users

The flawed COLA calculation is just one symptom of a deeper design problem. The entire Social Security system often feels adversarial, not assistive. Look no further than the recent, aggressive campaign by the Social Security Administration to claw back billions in overpayments. These are often errors made by the agency itself, yet the burden falls squarely on the beneficiary.

The system’s solution? Withholding up to 50% of a person’s monthly check until the debt is repaid. Think about that for a second. An elderly person, likely on a fixed income of less than $2,000 a month, suddenly has their lifeline cut in half because of a clerical error they had no part in—it's a feedback loop of bureaucratic inefficiency causing profound human suffering and it’s happening on a massive scale.

This is the hallmark of a poorly designed system. A good system has grace. It has redundancies. It assumes user error—and even its own error—and builds pathways to resolve issues without causing catastrophic harm. Instead, we have a rigid, unforgiving architecture that treats its users not as people to be supported, but as accounts to be balanced. Can you imagine if Amazon or Apple treated their customers this way? The public outcry would be deafening.

This isn't a call to bankrupt the system. It's a call to redesign it with empathy. It's a challenge to think of Social Security not as an unchangeable federal monolith, but as the largest and most important user-facing service in the country. We have the tools of modern technology—machine learning to spot errors before they cascade, user-friendly interfaces to navigate complex rules, and data analytics to build more accurate models like the CPI-E. Why are we letting our most vulnerable citizens operate on a system that feels like it’s from the age of the dial-up modem?

This Isn't a Policy Problem; It's a Design Problem

For too long, we’ve allowed the conversation about Social Security to be framed as an intractable political fight. It’s not. At its core, it is a massive-scale design and engineering challenge. The 2.8% - 2026 Cost of Living Adjustment isn’t just a number; it’s a data point proving the current system’s inadequacy. We can, and we absolutely must, do better. It's time to stop arguing about the legacy code and start designing the system upgrade our parents and grandparents have earned.