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The Social Security Administration announced on Friday (October 24) that recipients will see a 2.8% increase in their benefit payments in 2026. This adjustment, known as the cost-of-living adjustment (COLA), is designed to help beneficiaries keep up with inflation. Starting in January, the average monthly retirement benefit will increase by about $56, according to the agency.
This year's COLA is slightly higher than last year's 2.5% increase but remains below the historical average of 3.7%. The adjustment affects approximately 75 million Americans, including retirees, people with disabilities, and those receiving Supplemental Security Income. The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, reflecting price changes in goods and services.
While the increase aims to offset inflation, many seniors continue to face financial challenges as older adults often spend a larger share of their income on essentials like healthcare and housing. The National Council on Aging highlights that many seniors struggle with economic insecurity, with nearly 45% of older households unable to cover basic living costs.
The Social Security Administration will notify beneficiaries of their new payment amounts by mail and online starting in early December. Beneficiaries should also consider the impact of Medicare Part B premiums, which are expected to rise by 11.6% in 2026, potentially offsetting some of the COLA benefits. The New York Times notes that the increase in premiums could consume nearly half of the COLA for many recipients.