Trump’s Tariffs May Boost 2026 Social Security Payments (But at What Cost?)

President Donald Trump's tariff plan is beginning to make an impact throughout different areas of the economy. It's even possible that the tariffs could impact next year's Social Security payments in a positive way.

As you set yourself up for retirement, learn more about how tariffs might change the size of your Social Security payments in 2026.

How do Social Security payments change each year?

If you receive Social Security benefits, you likely have noticed increases in the size of your payments from year to year. These changes are tied to the Social Security cost-of-living adjustment (COLA).

The COLA is designed to counteract the effects of inflation. As inflation pushes costs up for Americans, Social Security payments are adjusted higher through a COLA.

These COLA changes are intended to help retirement income keep pace with inflation over time. But it's worth noting that even though the benefit check amount might rise, the dollars might not stretch as far.

That means that even with a COLA, it can be tough to avoid falling purchasing power as prices rise.

What was the COLA for 2025?

In 2025, the COLA is 2.5%. That means this year's Social Security payments are 2.5% higher than they were last year.

If you currently receive Social Security income, you likely noticed this change to your benefits check at the beginning of the year.

What is the COLA expected to be in 2026?

Based on recent inflation readings, experts currently expect the 2026 COLA to be between 2.2% and 2.3%, which is lower than the 2.5% COLA for 2025.

Predictions of a lower COLA are based on expectations of a falling inflation rate. If costs don't rise quickly, the COLA also stays low.

How might tariffs change the predicted 2026 COLA?

Importantly, expert predictions of a lower COLA in 2026 haven't really taken the impacts of tariffs into account, as they remain largely unknown at this point.

Since tariffs may push prices — and the overall cost of living — up for Americans, it's possible that the 2026 COLA will be higher than what is currently being projected.

If tariffs increase the pace of inflation, the COLA will likely also rise. Ultimately, this could mean larger monthly benefits checks for retirees.

Why a higher COLA might not be as great as you think

The idea of a larger monthly Social Security check sounds great. After all, who wouldn't want to see more money hitting their bank account each month?

But the reality is that a larger monthly Social Security check likely won't feel like a significant increase to your purchasing power. Even if the check is larger, it might not stretch far enough to cover the rising cost of goods and services.

For example, if tariffs make it more expensive to purchase groceries and other essentials, you'll likely still use the bulk of your Social Security check to cover basic costs.

Retirees who have received Social Security income for a while might have noticed this pattern over time: Although the numbers on your payment look more impressive, they don't always stand up to the tide of rising prices.

Bottom line

Even if Social Security payments increase in the coming year, the monthly check might not be enough to cover all of your retirement expenses.

So, if you need to boost your income, consider some ways to supplement your Social Security, such as getting a part-time job. A little extra cash will go a long way if Trump's tariffs send prices higher.