The Growing Middle-Class Retirement Concern Social Security COLA Isn’t Fixing

Retirees now know the Social Security COLA for next year is 2.8% Payments reflecting the increase begin in January 2026, but the modest bump of $56 per month, on average, won’t likely quell deeper concerns about the program among.

Many retired workers fear that their actual costs are rising faster than the adjustment, while those still in the workforce grapple with larger fears that Social Security won’t be there when they need it.

Many Middle-Class Americans Fear Social Security Won’t Be There

The Transamerica Center for Retirement Studies’ new report on the American middle class finds that almost half of those in their 50s and 60s list “Social Security being reduced or ceasing to exist” among their greatest retirement fears, with 4 in 10 expecting the program to be their primary source of income. That reliance, combined with years of headlines about solvency issues and policy debates, fuels persistent anxiety about retirement planning. 

Then there are the anxieties about inflation. The annual COLA is designed to track rising prices, but many older households say it doesn’t reflect the prices they actually face (healthcare, transportation, housing, food, and utilities). Indeed, the Senior Citizens League estimates retirees have lost meaningful buying power since 2010, leading to widespread sentiment that 2.8% “isn’t enough” amid rising essentials. While COLAs certainly help, it can still feel like treading water for many.

How Social Security Anxiety Is Changing Retirement Strategies

If you’re worried about Social Security falling short, you can channel your worries into action. Here are some constructive moves experts often suggest:

• Stress-test your plan (and write one if you don’t have one): Consider what a 10%–20% reduction in benefits might do to your retirement budget. If your budget still works, you’ve built some resilience. Transamerica also flags a planning gap: only a quarter of those in their 60s have a written retirement plan. 
• Delay claiming if feasible: Each year you wait beyond full retirement age (typically age 67) up to age 70 increases your permanent benefit, which can help offset future policy or inflation surprises. Pair a later claim with part-time work, if possible, to reduce early portfolio withdrawals.
• Keep building non-Social Security income: Max out 401(k), 403(b), or individual retirement account (IRA) contributions and employer matches (plus catch-ups if over the age of 50) so more of your retirement budget comes from savings, not just Social Security. 
• Diversify income streams: Blend guaranteed income (Social Security, any pension income) with market assets and, where appropriate and with the advice of a financial advisor, home equity strategies like a reverse mortgage.
• Coordinate withdrawals and taxes: Map out your claiming alongside Roth conversions, RMDs, and Medicare brackets. Smart sequencing can lift after-tax income more than a modest COLA ever will.

The Bottom Line

A 2.8% COLA provides some relief, but it won’t erase the underlying worry: that inflation, policy uncertainty, and longer life spans could steadily erode Social Security’s purchasing power. The solution isn’t to panic but to plan what you can. Delay your claim if you can, diversify your income sources beyond Social Security, and stress-test your retirement budget against lower benefits.