Social Security benefits in the United States could rise more than expected in the coming years, writes Newsweek. The publication emphasizes that this became possible due to inflation caused by the US war with Iran.
Since energy costs are a key driver of inflation and affect prices across all sectors of the economy, rising oil prices could have a significant impact on the Cost of Living Adjustment (COLA) calculation, Newsweek writes. This adjustment should offset the impact of inflation and preserve the purchasing power of retirees.
However, as the publication clarifies, rising energy prices have become one of the main reasons for the increase in consumer price growth in the United States. According to the US Federal Bureau of Labor Statistics (BLS) for May 2026, the Consumer Price Index (CPI), which is the government's main measure of inflation, rose 4.2% year over year.
At the same time, according to the US Social Security Administration (SSA), in 2025 alone, a total of about 72.9 million Americans received some type of benefit or assistance. As the SSA notes, Social Security benefits grew just 2.8% in 2026.
“Increasing benefits does not necessarily mean that retirees' financial situation will improve, since the increase is aimed only at compensating for rising costs, and not ahead of them,” adds Newsweek.
Rising oil prices will lead to higher inflation and therefore higher COLAs, which means higher Social Security benefits, the publication notes. Despite the prospect of increased benefits, experts warn that retirees should not view the rising cost of living as a financial benefit. This is due to household spending, notes Kevin Thompson, CEO of investment company 9i Capital Group.
“The increase in payments does not pass without a trace, since it is often accompanied by an increase in insurance premiums under the federal program [медицинского страхования] Medicare, not to mention rising food and energy prices,” Thompson said.
Alex Bean, a professor of financial literacy at the University of Tennessee at Martin, shares a similar position. Increasing Social Security benefits doesn't mean more money will be in recipients' pockets; in fact, their monthly benefits will match the increased costs they face, he explained.
“This may sound good for welfare recipients, but the problem is that the increase won't take effect until next year, and many welfare recipients are already facing price increases,” adds Bean.
Newsweek lists the evolution of the Iran conflict, overall energy costs and broader economic trends, including rising food and housing prices, as factors influencing the size of the 2027 payout. RTVI.US previously reported how record low oil reserves affect a potential peace agreement between Iran and the United States.
