Social Security Benefits Lose 13.7% of Their Buying Power Since 2016

Social Security's cost-of-living adjustment has one job: keep a retiree's check even with inflation. A new study says it has been losing that race for ten straight years.

The Senior Citizens League just published its 2026 Loss of Buying Power report. Benefits have lost 13.7 percent of their buying power since 2016. A 2016 dollar now buys about 86 cents.

But the story isn't just that Social Security fell behind. It's that it fell behind at the same time the bills retirees actually live with moved hard in the other direction.

Rent is up 669 dollars a month. Property taxes are up 376 dollars a year. Medicare Part A deductibles are up 448 dollars. Average home prices are up 176,300 dollars.

And here's the part people do not plan for. A lot of retirement plans assume inflation is normal, steady, and manageable. Very few people retire expecting to be hit with high inflation two decades later, when going back to work is harder, income is fixed, and the cushion has already been tested.

The mechanism is the yardstick. COLAs are calculated off the CPI for Urban Wage Earners, a basket built around working households, not retired ones.

So the League built its own index: 70 goods and services weighted toward what retirees actually buy. Their basket rose 43.6 percent. The CPI-W rose 37.6 percent. Ten years of that gap is the 13.7 percent.

These aren't discretionary line items. And 39 percent of seniors report Social Security as their entire income.

To restore 2016 purchasing power, the League calculates benefits would need to rise 15.8 percent. Roughly 296 dollars a month for the average beneficiary. The 2026 COLA was 2.8 percent.

One caveat, because it matters. That 43.6 percent is the League's own index, not a government statistic, and it deliberately prices the cheapest version of each item. An argument about the yardstick, not a replacement for it.

Now, if that squeeze has you weighing borrowing against your home: retirement changes what a lender sees. Income drops, savings grow, and the same borrower gets read differently. I built a short questionnaire that shows which options fit — Todd dot Mortgage slash Retirement. Or comment RETIRE and I'll send it.

I'm Todd Hanley. Housing is where this gap is widest, and it's the part I cover.

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