One thing that can be said for certain about Social Security is that it’s a massive program.
Nearly 75 million Americans receive some kind of Social Security benefit. As of 2024, roughly one-fifth of the federal budget was spent on Social Security, according to the Center for Budget and Policy Priorities, and those expenditures totaled about $1.5 trillion.
This kind of widespread reach can provide numerous benefits to Americans — but also contribute to numerous problems. Here are three of the biggest problems facing Social Security in 2026.
The COLA Formula
An ongoing concern among Social Security advocates is that the current formula to calculate the program’s annual cost-of-living adjustment (COLA) is insufficient to help seniors pay their bills.
As the Social Security Administration (SSA) noted, the annual COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It’s calculated by using the average rate of CPI-W inflation in the third quarter of the year. When those figures come out, the data for July, August and September will be added together and divided by three to get the average.
Critics of the formula say it doesn’t account for senior-specific expenses, such as increases in the Medicare Part B premium.
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“For years, Social Security’s cost-of-living adjustment has failed to keep up with the real cost increases seniors face,” Shannon Benton, executive director of The Senior Citizens League, told GOBankingRates. “While the COLA is meant to protect beneficiaries from inflation, it relies on an inflation formula that does not accurately reflect how older Americans spend their money.”
One big problem is that seniors spend a higher share of their income on necessities such as housing, prescription drugs, utilities and health care than other age groups.
“[These are] costs that have risen faster than overall inflation,” Benton said. “When the COLA understates those increases, beneficiaries effectively lose purchasing power year after year… Switching to the Consumer Price Index for the Elderly (CPI-E) would better reflect seniors’ real costs of living and help ensure Social Security benefits keep pace with the expenses retirees actually face.”
Staffing Shortages
Early in President Donald Trump’s second term, his administration announced plans to cut more than 7,000 SSA jobs and close at least 10 field offices.
As of December 2025, at least 7,000 SSA workers had been laid off, the Associated Press reported. It’s harder to know how many offices have closed because the SSA website doesn’t provide much information on closures, other than this page.
What is known is that even before the 7,000 job cuts were announced, the SSA’s staffing levels were already close to a 25-year low — despite the fact that the number of Social Security recipients continues to rise each year as more baby boomers claim benefits.
The Center for American Progress and other organizations have sounded the alarm that an understaffed SSA could lead to recipients missing vital information or even needed benefits.
“The Trump administration has already plunged Social Security into crisis by pushing out thousands of the most experienced, knowledgeable workers,” Nancy Altman, president of Social Security Works, said in a statement shared with GBR. “They are causing chaos and real harm, including ending paper checks for Americans who have previously shown they need them.”
Customer Service Challenges
One byproduct of the SSA’s staff cuts is that there aren’t enough people to provide customer service, experts say. That problem could worsen in 2026.
The agency’s diminished workforce has “struggled to respond to up to 6 million pending cases in its processing centers and 12 million transactions in its field offices,” according to a recent report from The Daily Record, a Maryland-based business, legal and legislative news site that conducted dozens of interviews and analyzed internal SSA documents.
This has led to “record backlogs that have delayed basic services to millions of (SSA) customers,” The Daily Record noted.
Things might not get much better in 2026. As the AP reported, the SSA aims to cut visits to its field offices “in half” next year — a move that Social Security advocates fear could lead to more closures and a rise in customer service delays.
“The reason for this poorly thought-through idea seems to be the self-inflicted problem of an understaffed agency,” Altman said in a separate statement this month, which was also shared with GBR. “There’s a much better solution: Reverse last year’s cuts and fully staff our Social Security field offices.”
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This article originally appeared on GOBankingRates.com: 3 Biggest Problems Facing Social Security in 2026
