Millions of Americans receiving Social Security will see a modest bump in their monthly payments next year. The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, translating to an average increase of about $56 a month for retirees.
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Find out what this will mean for your retirement income.
Who Will See the Increase
The adjustment, which takes effect in January, is meant to help benefits keep pace with inflation. About 71 million Social Security beneficiaries will receive higher payments, along with roughly 7.5 million people who collect Supplemental Security Income (SSI). SSI recipients will see their increase one day earlier, on Dec. 31, 2025.
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How the COLA Is Calculated
The COLA is determined each year based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, measured during the third quarter of the year. If there is no increase in the CPI-W, there is no COLA.
Context for the 2026 Increase
This year’s 2.8% increase reflects slowing inflation after a stretch of larger adjustments driven by rising prices in 2022 and 2023. In 2023, for example, benefits rose by 8.7%, the biggest jump in more than four decades, followed by smaller gains as inflation eased.
Notably, The Senior Citizens League had projected a 2.7% COLA for 2026, putting their estimate only a fraction below the actual number.
What It Means for Retirees
For the average retiree receiving around $2,000 a month, the 2026 COLA will lift payments to roughly $2,056. While that represents a welcome increase, The Senior Citizens League says the higher checks may not fully offset rising costs in key areas such as health care, housing and utilities, expenses that tend to climb faster than overall inflation.
The annual adjustment has become a lifeline for retirees and others living on fixed incomes, many of whom continue to feel the impact of higher prices even as inflation cools. According to the Bureau of Labor Statistics, shelter costs remain elevated and medical expenses are expected to rise again next year.
Automatic Increase
The increase will be automatic, recipients don’t need to take any action to receive it. Notices detailing new payment amounts are typically mailed in December and posted in beneficiaries’ online Social Security accounts.
Considerations for Medicare
For some, however, the higher benefit could be partially offset by other rising costs. The Centers for Medicare & Medicaid Services (CMS) projects that Medicare Part B spending will continue to grow faster than overall economic growth, suggesting that premiums deducted from many retirees’ monthly checks are likely to increase in 2026. As a result, some beneficiaries could see a smaller net gain once those deductions are factored in.
Even so, the 2.8% adjustment marks a return to more typical COLA levels after several years of unusually high increases. Since automatic adjustments began in 1975, annual COLAs have averaged about 3.2%.
Importance of the COLA
The Social Security COLA plays a critical role in maintaining the program’s purchasing power over time. Without it, inflation would steadily erode the value of monthly benefits.
While the 2026 bump won’t close the gap between income and rising living costs for everyone, it offers some relief and a reminder of how vital the annual adjustment remains for tens of millions of Americans who rely on Social Security as their primary source of income.
For more information, see the 2026 Cost-of-Living Adjustment (COLA) Fact Sheet from the Social Security Administration.
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This article originally appeared on GOBankingRates.com: 2026 Social Security COLA Will Increase Benefits About $56 a Month
