Trump Tariffs May Increase Social Security Benefits
President Donald Trump’s recent tariff policies may lead to increased Social Security benefits due to higher inflation. The cost-of-living adjustment (COLA) for these benefits, starting in 2026, will be influenced by the preceding year’s inflation levels.
Impact of Trump Tariffs on Social Security Benefits
The tariffs have caused trade tensions and raised prices on various goods, impacting inflation. This inflation could cause a boost in the monthly payments for over 70 million Americans who rely on Social Security.
Key Influences
- Trump’s 10% global tariff and reciprocal tariffs have increased prices on numerous items.
- This results in a probable rise in the upcoming COLA.
However, while checks may increase, the buying power of these benefits may not effectively rise due to the same inflation. Michael Ryan, a finance expert, notes that this adjustment fails to fully compensate for the increased prices that retirees have already endured.
Economic Perspectives
The Senior Citizens League predicts a 2.7% COLA for 2026. Kevin Thompson, CEO of 9i Capital Group, expects the adjustment to be within the range of 2.7% to 2.9%.
Experts, including Alex Beene from the University of Tennessee at Martin, argue that the increase serves more as an inflation offset rather than a financial advantage for seniors.
Challenges for Seniors
The rising COLA will also increase Medicare Part B premiums, which are deducted from Social Security payments. Thus, the expected “bump” in benefits may not substantially improve financial situations for most retirees.
Ryan notes that this scenario leads to merely balancing the effects of inflation rather than providing an actual financial benefit. Seniors continue to face financial strain as costs increase, without seeing substantial improvements in their buying power.
