Several proposals modeled by the Social Security Administration’s Office of the Chief Actuary could reduce future annual cost-of-living adjustments, or COLAs, for millions of beneficiaries as policymakers consider options to improve Social Security’s long-term finances.
The proposals are not current law, and they do not mean Social Security benefits have already been cut. For now, these remain policy options modeled by the Social Security Administration. The SSA lists them as policy provisions and estimates their potential financial effects using the intermediate assumptions of the 2026 Trustees Report. Proposal would reduce annual COLA by 1 percentage point For example, if the COLA calculated under the current system were 3%, the increase would be 2% under this proposal. The SSA’s 2026 solvency estimates project that the proposal would eliminate 46% of Social Security’s long-range actuarial shortfall and 44% of the projected annual shortfall in the 75th year. A separate option would reduce the annual COLA by 0.5 percentage point starting in December 2027, according to the Social Security Administration’s policy options list.
None of the proposals described above has been enacted into law, and Congress would have to approve legislative changes before the current COLA formula could be altered.
