Social Security COLA 2026: How Much Will Payments Increase Next Year?

If you receive Social Security benefits, you know the annual Cost-of-Living Adjustment (COLA) is essential for maintaining your financial stability. This adjustment ensures your monthly check keeps up with rising inflation.

The Social Security Administration has announced the official Social Security COLA 2026 at 2.8%. We'll break down what this means for your average monthly benefit, how the number was determined, and what you need to know about upcoming Medicare costs.

What is the Social Security COLA?

The Cost-of-Living Adjustment, or COLA, is an automatic increase in Social Security and Supplemental Security Income (SSI) benefits. Its sole purpose is to ensure that the purchasing power of your benefits is not eroded by inflation.

Think of it this way: if a gallon of milk cost $3.00 last year and costs $3.08 this year, you need a little extra money just to buy the same milk. The COLA is designed to provide that "little extra" so you can maintain the same standard of living year after year.

The COLA is calculated each year and is applied to all types of Social Security benefits, including:

• Retired worker benefits (Old-Age)

• Survivor benefits

• Disability benefits (SSDI)

• Supplemental Security Income (SSI)

Official 2026 COLA Announcement

The official announcement of the 2026 Social Security COLA was made by the Social Security Administration (SSA) on October 24, 2025.

Due to the reliance on specific economic data, the announcement typically happens in mid-October, right after the release of the Consumer Price Index data for September. This year's official release confirmed the increase you can expect to see in your January 2026 payment.

Percentage Increase for 2026

The Social Security Administration has officially announced that the Cost-of-Living Adjustment (COLA) for 2026 will be 2.8%.

This 2.8% increase will be applied to your current monthly Social Security benefit amount. It reflects a moderate but steady rate of inflation throughout the previous year, placing it slightly above the COLA from the previous year.

Impact on Average Monthly Benefits

What does a 2.8% increase actually look like in dollars and cents for you? The total dollar amount of your COLA will vary based on the size of your current benefit. However, we can look at the estimated impact on the average benefit amounts for different groups:

Average Increase for Retirees

The Social Security Administration estimates the average monthly benefit for all retired workers before the 2026 COLA was approximately $2,015.

With the 2.8% COLA, the estimated new average monthly benefit for a retired worker will be $2,071.

Average Monthly Increase: Approximately $56

Changes for Disability Beneficiaries

Individuals receiving Social Security Disability Insurance (SSDI) will also see the 2.8% increase applied to their payments.

The estimated average monthly benefit for all disabled workers before the 2026 COLA was approximately $1,586.

With the 2.8% COLA, the estimated new average monthly benefit for a disabled worker will be $1,630.

Average Monthly Increase: Approximately $44

Note: Your personal increase will be exactly 2.8% of your specific benefit amount.

How the Social Security COLA 2026 Was Determined

The COLA is not determined by Congress or by a simple vote. It is based on a specific, non-political formula set by law.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index is calculated monthly by the Bureau of Labor Statistics (BLS) and tracks the average change in prices that consumers pay for a fixed basket of goods and services.

Here is the exact calculation process for the 2026 COLA:

1. Measurement Period: The SSA compares the average CPI-W from the third quarter (July, August, and September) of the current year (2025) with the average CPI-W from the third quarter of the last year a COLA was provided (2024).

2. Determining the Increase: The percentage increase between these two averages is calculated.

3. Applying the COLA: If there is an increase, it is rounded to the nearest one-tenth of one percent (0.1%). This rounded percentage becomes the official COLA. If there is no increase, there is no COLA for the following year.

The 2.8% COLA for 2026 was the result of the CPI-W rising by that percentage between the third quarter of 2024 and the third quarter of 2025. This rise suggests a continued, though cooling, pace of inflation in the general economy.

Comparison to Previous Years' COLAs

The 2.8% COLA for 2026 sits in the middle compared to recent history. Understanding how it compares to the past few years gives you better context for your benefit increase:

Year	COLA Percentage	Context
2026	2.8%	Reflects continued moderate inflation.
2025	2.5%	Slightly lower than 2026.
2024	3.2%	Inflation was higher but had already begun to cool down.
2023	8.7%	The largest COLA in over four decades, driven by a massive spike in post-pandemic inflation.
2022	5.9%	A significant jump from previous years as inflation began to surge.
2021	1.3%	Reflected low inflation during the previous year.

While 2.8% may seem modest compared to the high-inflation years of 2023 and 2024, it is actually an above-average increase compared to the average COLA of the past decade, which was closer to 2.3%.

Implications for Federal Retirees

The Social Security COLA has a direct and important impact on benefits for retired federal employees as well.

The COLA increase for benefits under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) is closely linked to the Social Security COLA:

CSRS Benefits: If you are a CSRS retiree, your annuity increase is determined by the same CPI-W used for the Social Security COLA. You will receive the full 2.8% increase.

FERS Benefits: If you retired under FERS and are under age 62, your annuity increase is slightly reduced when the COLA is 3.0% or higher. However, because the 2026 COLA is 2.8% (less than 3.0%), you will receive the full 2.8% increase, just like CSRS retirees.

This adjustment for federal annuities will also take effect starting with your January 2026 payment.

Tips for Beneficiaries to Prepare

While any increase in benefits is welcome, you must take a few practical steps to make sure you get the most out of your 2026 COLA:

Review Your Net Income: The COLA is applied to your gross benefit. You must account for your Medicare Part B premium deduction (see Section 12). Don't just plan on receiving the full 2.8% increase in your bank account—the Medicare premium increase will reduce your final take-home amount.

Update Your Budget: The 2.8% increase should be factored into your household budget. Pay close attention to how much your major expenses, such as housing, food, and especially healthcare, have actually increased for you personally.

Check for Taxable Income: A higher benefit might push your "combined income" over the federal thresholds that determine if your Social Security benefits are taxable. These thresholds are currently $25,000 for single filers and $32,000 for married couples filing jointly. If you are close to these limits, you may want to consult a tax professional.

Stay Alert for Scams: Unfortunately, whenever a big financial announcement is made, scammers come out. The SSA will not call, text, or email you asking for your Social Security number, bank account details, or any form of payment to receive your COLA. Your notice will come by mail or through your official my Social Security account.

When Will the 2026 COLA Take Effect?

The 2026 COLA increase will officially take effect for all Social Security beneficiaries with the January 2026 benefit payment.

Since Social Security payments are made for the preceding month, the check you receive in January 2026 is actually the payment for December 2025, and it will be the first one to reflect the new 2.8% increase.

SSI Recipients: If you receive Supplemental Security Income (SSI), your increased payments will actually begin on December 31, 2025, because the SSI benefit for January is paid on the last business day of the previous month.

How to Access Your Updated Benefits

You have two main ways to find out your specific new benefit amount:

1. Online Through my Social Security: This is the fastest and most secure method. Starting in late November 2025, your official COLA notice, which includes your exact new payment amount and any deductions (like Medicare), will be available in the Message Center of your personal my Social Security online account. If you don't have an account, you can create one for free on the SSA website.

   
   

2. By Mail: The SSA will mail simplified COLA notices to all beneficiaries throughout December 2025. This mail notice will clearly state your old benefit, the 2.8% increase, and your new net payment amount.

Additional Considerations for Medicare Costs

This is arguably the most critical section for you to understand, as it can significantly reduce your net COLA increase.

Most Social Security retirees and disabled workers have their Medicare Part B premium deducted directly from their monthly benefit check. Because Medicare costs are rising, the Part B premium often increases, which can absorb a large portion of your COLA.

For 2026, the standard monthly premium for Medicare Part B is slated to increase significantly:

• 2025 Standard Premium: $185.00

• 2026 Standard Premium: $202.90

• Monthly Increase: $17.90

The Real Impact on Your Net Benefit

For the average retiree who is receiving a gross COLA increase of about $56 per month, an increase of $17.90 in the Medicare Part B premium means:

Gross COLA Increase: $56.00

Minus Medicare Part B Premium Increase: $17.90

Net Monthly Increase: $38.10

For the average person, the $17.90 increase in the Medicare premium will consume nearly one-third of your gross COLA. If your Social Security benefit is smaller than the average, this Part B increase could consume half or more of your total COLA.

Additionally, you should be aware of other rising Medicare costs:

• The annual Medicare Part B deductible is also increasing to $283 in 2026 (up from $257).

• High-income beneficiaries must also pay an Income-Related Monthly Adjustment Amount (IRMAA) for both Part B and Part D, and these surcharges will also increase for 2026.

This is why it is so important to see your official COLA notice in November/December—it will show you the exact dollar amount of your net benefit after all deductions.

Conclusion

The 2.8% Social Security COLA 2026 is a helpful step to manage inflation, but it will be partially offset by rising Medicare costs. We encourage you to review your official notice and update your household budget to protect your financial wellness.

Remember that as your needs evolve, having reliable support at home can help you live independently. If you or a loved one needs assistance managing daily tasks, please contact A Circle Of Love Home Care for a compassionate consultation today.