Beginning in January 2026, millions of Americans will receive a 2.8% cost-of-living adjustment (COLA) to their Social Security and Supplemental Security Income (SSI) benefits.
The Social Security Administration (SSA) confirmed the increase, marking a modest but meaningful boost in monthly income for retirees, disabled workers, and others who rely on these vital programs.
Why the Increase Matters
While the COLA is an annual update designed to keep pace with inflation, its impact is particularly significant in today’s economy.
For the average Social Security recipient, the adjustment equals roughly $56 more per month—a small sum on paper, but an important lifeline for those juggling rising food prices, rent, utilities, and healthcare costs.
A Lifeline for Millions of Retirees
Nearly nine in ten Americans aged 65 or older receive Social Security benefits, and for many, it forms the backbone of their financial stability.
According to the SSA, Social Security makes up about 31% of retirees’ total income. Even a slight percentage increase can make the difference between covering basic needs and falling behind amid a still-costly economic climate.
“Social Security is a promise kept,” said Commissioner Frank J. Bisignano in the official announcement.
“The annual cost-of-living adjustment ensures that benefits reflect today’s economic realities. It’s one of the ways Social Security continues to deliver on its mission to protect America’s seniors.”
How to Find Out Your New Benefit Amount
Beneficiaries will begin receiving COLA notices by mail in early December, but there’s a faster, more secure way to check your new benefit amount—through your my Social Security account at SSA.gov. By logging in, you can view your personalized 2026 benefit information directly in your message center.
Those who create an account by November 19 can see their updated figures before paper notices arrive. You’ll need your Social Security number, an email address, and basic personal details to verify your identity.
From there, users can manage direct deposits, request replacement Social Security cards, and estimate future benefits all in one place.
Prefer Digital Updates?
If you’d rather skip mailed paperwork, you can opt for email or text notifications through your account preferences.
This ensures you never miss important updates—especially during the year-end period, when COLA announcements, tax changes, and Medicare updates often arrive around the same time.
Doing the Math Yourself
For those curious to calculate the change manually, it’s simple: multiply your current monthly benefit by 0.028. For example, if you currently receive $1,900 per month, your 2026 payment will increase to about $1,953, adding $53 monthly. While this bump is higher than 2025’s 2.5% increase, it still falls short of the 10-year average COLA of 3.1%.
A Modest Boost in a Cooling Economy
The 2026 adjustment reflects a period of cooling inflation following the pandemic-era price spikes of previous years. Analysts had predicted a conservative increase, given slowing consumer price growth and the Federal Reserve’s efforts to stabilize the economy.
Still, for fixed-income Americans, every dollar counts—especially with persistent inflation in essentials like housing and healthcare.
Making the Most of the Increase
A 2.8% raise may not feel transformative, but smart planning can help retirees make the most of it. Many financial experts recommend directing part of the extra funds into high-yield savings accounts, which currently offer 4%–5% interest, or certificates of deposit (CDs) for longer-term, low-risk growth.
Money market accounts are another flexible option, offering modest returns while maintaining easy access to cash. These moves can help offset inflation’s lingering effects and create a small cushion for unexpected expenses.
Watch for Tax Implications
For retirees with multiple income sources, even modest COLA increases can shift their taxable income higher.
If your combined income—Social Security plus other earnings—crosses certain thresholds, a larger portion of your benefits may become taxable. Experts recommend reviewing your tax strategy with a financial advisor before year’s end to avoid surprises next spring.
Higher Earnings Cap for Workers
In tandem with the COLA, the SSA announced that the maximum taxable earnings subject to Social Security payroll tax will rise from $176,100 to $184,500 in 2026. While that means higher contributions for high-income workers, it also translates into larger future benefits once they retire.
What About Medicare?
The Centers for Medicare & Medicaid Services (CMS) will announce 2026 Medicare premium changes and coverage updates by late November.
Beneficiaries can view this information through their my Social Security accounts or wait for mailed notices in December. Medicare Part B premiums typically adjust annually and may partially offset the new COLA for some retirees.
How COLA Is Calculated
Each year’s adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks changes in the cost of everyday goods and services.
The SSA uses inflation data from the third quarter (July–September) to determine the following year’s increase, ensuring that benefits remain aligned with real-world living expenses.
The Bottom Line
For millions of retirees, disabled workers, and low-income Americans, the 2026 COLA is a modest but meaningful boost amid persistent economic pressure.
While it won’t erase the strain of rising prices, knowing how to access and manage your new benefits can help stretch every dollar further. With a little planning, even a small increase can make a big difference.
