Social Security Benefits to Increase by 2.8% in 2026

On October 24, 2025, the Social Security Administration (SSA) announced that Social Security beneficiaries will receive a 2.8 percent cost-of-living adjustment (COLA) in 2026. This increase applies to recipients of both Social Security and Supplemental Security Income (SSI) — including retirees, their spouses and survivors, as well as individuals who receive disability benefits.

The COLA is based on annual changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks inflation and ensures that benefits retain their purchasing power over time. According to SSA estimates, nearly 71 million Social Security beneficiaries will see the increase starting in January 2026, while approximately 7.5 million SSI recipients will receive higher payments beginning on December 31, 2025. Some individuals receive both types of benefits and will see the adjustment reflected across both programs.

How Much Will Benefits Increase?

The 2.8 percent COLA marks a modest uptick from the 2.5 percent increase in 2025. In practical terms, the average retired worker’s monthly benefit will rise by about $56 per month, bringing the total average monthly payment to roughly $2,064.

While the increase offers some relief, many retirees and disabled individuals may still find it challenging to keep pace with rising costs. Inflation has remained persistent in key categories that affect older Americans the most, including medical care, housing, and long-term care. For many, the additional $50–$60 per month may be absorbed quickly by higher out-of-pocket expenses or prescription costs.

FREE WEBINAR

5 Things to Know About

Estate Planning

When You Turn Sixty-Five

Save the Date

Friday, Nov 14^th at 2:30pm

What This Means for Social Security Recipients

If you currently receive Social Security benefits, your January 2026 payment will automatically reflect the 2.8 percent increase, unless adjusted by other deductions or income-based offsets. SSI recipients will notice the change starting with their December 31, 2025, payment.

Beneficiaries will begin receiving notices of their new benefit amounts in early December, either by mail or electronically through their my Social Security accounts. Those who prefer digital access can log in to view their benefit adjustment and updated payment schedule.

The Medicare Premium Factor

It’s important to remember that many seniors have their Medicare Part B premiums deducted directly from their Social Security checks. The premium rate for 2026 has not yet been announced, but historically, increases in Medicare premiums have offset part of the COLA for many retirees. As a result, the effective take-home increase could be smaller than expected, particularly for individuals on fixed incomes who rely on every dollar of their Social Security benefit.

Context and Economic Outlook

At 2.8 percent, the 2026 COLA is considered moderate compared to the average of roughly 3.1 percent over the past decade. The adjustment reflects efforts to stabilize benefits after several years of higher inflation but remains below the pace of cost increases for many essentials, especially health care and long-term care services.

Critics argue that the CPI-W does not accurately reflect the spending habits of older Americans, whose budgets are heavily weighted toward medical expenses and caregiving costs. An alternative measure — the Consumer Price Index for the Elderly (CPI-E) — has been proposed for years as a more accurate reflection of retiree inflation, but it has not yet been adopted for COLA calculations.

Still, the 2026 adjustment represents an important acknowledgment of inflationary pressures and ensures that benefits continue to provide a basic safeguard against the erosion of purchasing power.

Why COLA Matters

For millions of retirees, the annual COLA is not merely an adjustment — it’s a lifeline that helps maintain financial stability in retirement. Even a seemingly small percentage increase can have a significant cumulative impact over time, especially for beneficiaries on fixed incomes. In 2026, that increase may help offset incremental rises in food prices, property taxes, and medical premiums, though many seniors will still face gaps that require supplemental income or financial planning strategies.