The Social Security Administration has announced a 2.8% cost-of-living adjustment (COLA) for 2026, providing a modest raise to more than 75 million Americans who receive Social Security or Supplemental Security Income (SSI).
The increase aims to help beneficiaries keep pace with inflation, though many seniors argue that rising costs continue to outstrip the annual adjustments.
What the Increase Means
Starting in January 2026, Social Security retirement beneficiaries will see an average monthly increase of about $56, raising the average payment to roughly $2,071.
Nearly 71 million people will benefit from this adjustment. Meanwhile, about 7.5 million SSI recipients will see their higher payments begin on December 31, 2025.
According to Social Security Commissioner Frank J. Bisignano, “Social Security is a promise kept, and the annual cost-of-living adjustment is one way we ensure benefits reflect today’s economic realities.”
Why the Increase Is Smaller Than in Previous Years
The new 2.8% COLA is slightly higher than this year’s 2.5% adjustment but well below the substantial increases seen during the pandemic-era inflation surge. In 2023, for example, beneficiaries saw an 8.7% boost—the largest in four decades—due to skyrocketing consumer prices.
The COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in consumer prices between July and September each year. While inflation has moderated since its 2022 peak, September’s CPI still showed prices up 3% year-over-year, according to the Bureau of Labor Statistics.
Medicare Premiums Could Offset Gains
Many retirees may not feel the full benefit of the COLA due to rising Medicare Part B premiums, which are deducted directly from Social Security payments.
The 2026 premium is projected to climb to more than $206 per month, up from $185 this year—nearly double the prior year’s increase. That hike could consume nearly half, or even all, of the COLA for some beneficiaries.
Decade-Long Trend and Concerns About Accuracy
Over the last decade, the average COLA has been around 3.1%, but advocates argue that the formula doesn’t fully reflect seniors’ real costs—especially in health care.
According to The Senior Citizens League, Social Security benefits have lost about 20% of their buying power since 2010, meaning retirees would need roughly $370 more per month to maintain the same standard of living.
Groups like AARP have called for reforms to make the COLA more representative of older Americans’ spending patterns. “The CPI for working Americans doesn’t quite capture what the spending patterns are for older Americans,” said Joel Eskowitz, senior director of Social Security at AARP’s Public Policy Institute.
Additional Changes for 2026
Other annual adjustments will also take effect in January. The maximum amount of earnings subject to the Social Security tax will rise from $176,100 to $184,500.
Beneficiaries will begin receiving notifications about their updated benefits by mail in early December.
Those with a my Social Security account can view their COLA notice online starting in late November, with email or text alerts available.
For more information, beneficiaries can visit www.ssa.gov/myaccount or www.medicare.gov to review upcoming Medicare changes.
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