Latest social security costs for lifespan: any good news with a worse report?

The recent prediction of the cost of living costs show that the recipients of social security could be with a small increase for another year.

The most recent prediction by the Senior Citizens League shows an estimated 2026 cola of 2.3%. This is below the annual change of 3% in the CPI-W, the index for calculating cola, according to the Bureau of Labor Statistics. If the prediction and inflation dropped out in the course of the year, the Cola would be 0.2 percentage points lower from 2026 than in the previous year of 2.5%, said TSCL.

Read more: Social insurance The full retirement age increases in 2025

However, there are some good news for pensioners.

MP Thomas Massie, R-Kentucky, has reintroduced a legislative template in order to comply with President Trump’s promise to remedy income taxes on social security benefits. Originally proposed in 2023, the law on the elimination of senior citizens tax would significantly reduce the tax burden of the elderly.

“The removal of taxes on social security benefits would be an excellent step to ensure the American seniors financial relief, many of which have to deal with the cost of living that grow much faster than their income. It would also reduce twice the tax, which is naturally unfair, ”said Shannon Benton, Executive Director of TSCL, in a statement.

TSCL estimated that the elimination of taxes on social security would save the typical pioneer of around 3,000 US dollars annually if they are implemented this year. A typical managerial budget would pay 3,940 US dollars of federal income taxes if the social security benefits were excluded, compared to the applicable law, which led to a saving of 3,082 US dollars.

The change would also eliminate the “double taxation”, said TSCL, since the beneficiaries of social security have already paid taxes on their contributions via the salary statement.

However, seniors with low incomes would not benefit from exclusion. Seniors who earn under a certain amount are already released from taxes on their services.

If it is not adopted, the tax thresholds, which have not been adapted to inflation since 1984, will lead to seniors control with low incomes, as the annual colas accumulate, says TSCL.

“We have to do even more for seniors with low incomes, the dignity of which depends on social security payments that have already lost 20 percent of their purchasing power in the past 15 years. Many seniors with lower income do not already do enough to pay taxes on their social security benefits, and the only way to help them is to reform the colas of social security, ”said Benton.

Colas, which are supposed to prevent the advantages eroding by inflation, are determined by data from the consumer price index for urban wage earners and employees who pursue the average price of a shopping cart. The average CPI -W for the third quarter – July, August and September – of the previous year, is compared with the same period of the current year, with the difference to the cola. The official Cola of 2026 will be announced in October.