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Social Security COLA 2026 sparks call for change to calculation

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9 months ago

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A Social Security cost-of-living adjustment of 2.8% will go into effect in 2026, increasing retirement benefits by $56 per month on average, according to the Social Security Administration. With many older Americans struggling to keep up with rising prices, the moderate adjustment is reigniting a long-standing debate on the calculations that go into the COLA.

The size of the latest cost-of-living adjustment is about average. Out of 51 COLAs that have been put into effect since 1975, the 2026 adjustment ranks at No. 29, according to The Senior Citizens League.

Yet just 10% of seniors are happy with the annual COLAs, a recent survey from the nonpartisan senior group found, based on responses from 1,920 adults age 62 or older.

The COLA is assessed each year to help benefits for approximately 75 million Americans keep pace with rising costs. Changing the underlying data used in its calculation could affect the size of beneficiaries’ payments, and also have implications for Social Security’s trust funds, which are running low.

The Social Security cost-of-living adjustment is calculated based on a subset of the consumer price index, formally known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

“CPI-W has always been the measure that was used,” said Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center.

The announcement of the COLA for 2026 prompted some Democrats in Washington to propose a bill to change the index used for the COLAs to the Consumer Price Index for the Elderly, or CPI-E, which some contend would better reflect seniors’ spending. Another group of Washington Democrats has pitched increasing benefits by $200 per month for six months in 2026 to help beneficiaries cope with elevated consumer prices.

“We want the CPI-E or 3%, whichever one is higher,” Shannon Benton, executive director at The Senior Citizens League, said of the group’s long-term campaign for a more generous COLA.

Social Security checks under different measures

Yet the data suggests that switching to a different COLA measure might not result in the substantial boost to benefits that retirees and other beneficiaries hope to see.

Based on the current COLA formula, a person who claimed a $1,000 monthly benefit in 2005 would be receiving $1,601 now, according to Sprick’s calculations.

If instead the COLAs had been indexed to the CPI-E over that period, their benefits would be $1,622 now, or just 1% more, according to Sprick.

Another measure that’s often suggested for the COLA — the chained CPI — would result in a benefit of $1,555 now, or 3% less than the current formula, Sprick’s calculations found.

Likewise, 2024 calculations by Alicia Munnell, a senior advisor at the Center for Retirement Research at Boston College, found the average annual rate increase for the CPI-W was 2.5% from 2000 to 2023, based on CPI data from the Bureau of Labor Statistics. The CPI-E would have pushed that average annual rate of increase to 2.6% in those years, while the chained CPI would have resulted in a 2.2% average boost to benefits, Munnell found.

“It all depends on when you retire,” said Mary Johnson, an independent Social Security and Medicare analyst, who is among the advocates for switching to the CPI-E.

“In some years, it would have made a very big difference,” Johnson said. “In other years, not so much.”

Yet over the course of a 20- to 25-year retirement, indexing the COLA to the CPI-E would result in slightly higher benefits — and that compounds over time, she said.

COLA calculations under other indexes

The current index used to calculate the COLA, the CPI-W, measures the changes in prices for a basket of goods and services consumed by urban wage earners and clerical workers.

It is a subset of the broader CPI index used to measure the rate of monthly and annual inflation, or the Consumer Price Index for All Urban Consumers, or CPI-U. The CPI-W and CPI-U indexes track each other very closely, according to Sprick, and over time will produce the same average COLAs.

The CPI-E weights expenditures differently compared with the CPI-W, with medical care, housing and recreation costs comprising a larger portion of the index, according the Bipartisan Policy Center. Other costs — including apparel, education, food and transportation — are not emphasized as much as they are in the CPI-W.

Another index, the chained CPI, shows how consumers adjust their buying behavior in response to price changes across categories, such as substituting chicken when the price of beef rises.

The chained CPI is “most accurate” because it includes a broader segment of the population, according to Romina Boccia, director of budget and entitlement policy at the Cato Institute, who is among the advocates for changing to that measure.

The chained CPI represents 1 out of 8 Americans in its calculation, while the current index used for the COLA, the CPI-W, includes the purchasing behavior of 1 in 3 Americans who are not seniors, Boccia said.

The chain component of the CPI reflects not only inflation, but also its impact on purchasing power, she said.

“That’s what we’re really trying to account for, is the purchasing power of the Social Security benefit,” Boccia said. “We’re trying to keep that fixed.”

Updating the way the COLA is measured, and in turn, the benefits people receive, would have an impact on Social Security’s trust funds. The trust fund the program relies on to pay retirement benefits may run out in 2032, according to the Social Security Administration’s latest projections based on changes in the “big beautiful” legislation Congress passed in July.

A switch to the chained CPI would reduce the program’s shortfall by 14%, while turning to the CPI-E would increase it by 11%, according to the Bipartisan Policy Center, citing estimates from the Social Security chief actuary.

Even as Social Security faces long-term funding woes, 34% of respondents in The Senior Citizens League survey said they would want the Trump administration and Congress to prioritize better COLAs, while 33% said they would want fixing the program’s finances to come first.

Some experts say other reforms could help

Many of today’s seniors say the current COLA only goes so far to help with higher costs. Prices for electricity, natural gas and meat are still up significantly, said Johnson, who is retired.

“Heaven help you if you have a flat tire or you need to do something with your car,” Johnson said. “Just the parts are so expensive these days.”

Beneficiaries are also expected to face higher Medicare Part B premiums in 2026. Medicare’s trustees have projected the standard monthly premium may rise 11.6% to $206.50 next year, up from $185 per month in 2025. Because those premiums are typically deducted directly from Social Security checks, they will affect how much of the COLA beneficiaries may see reflected in their checks.

How far Social Security benefits go depends on the area in which a retiree lives, according to the Elder Economic Security Standard Index, which was developed by the Gerontology Institute at the University of Massachusetts Boston to measure the income older adults need to pay for their basic needs and age in place.

What you need to know about Social Security

“While the cost-of-living adjustment is important, there are still too many people who are at the maximum benefit they can withdraw, whether it’s individual or with a spouse, [that] is still really low,” said Michelle Putnam, director of the Gerontology Institute.

Social Security is the primary source of income for 40% of older Americans, according to AARP.

To help shore up benefits for those who are struggling, some experts, including Boccia at the Cato Institute and Sprick at the Bipartisan Policy Center, say broader benefit reform is necessary.

“Certainly, benefits should be strengthened for some beneficiaries; the way to do that is not through COLA,” Sprick said.

Instead, the way benefits are calculated could be changed to ensure that beneficiaries who are at the lower end of the lifetime earnings distribution receive an adequate benefit from the time they claim, he said.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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