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Social Security COLA Update for 2026!

  • Writer: Honest Healthcare
    Honest Healthcare
  • Oct 25, 2025
  • 8 min read

What You Need to Know About the 2026 COLA for Social Security


Each year, millions of Americans rely on their benefits from the Social Security Administration (SSA), and one of the key mechanisms to help maintain purchasing power is the Cost-of-Living Adjustment (COLA). In 2026, that adjustment has been announced as 2.8%.


In this comprehensive blog post, we’ll break down:

  • What the 2026 COLA means for beneficiaries

  • How the adjustment is calculated

  • What other changes accompany the COLA

  • Why many observers believe 2.8% may not be enough

  • Practical take-aways and what you should do next


If you (or someone you know) receive Social Security retirement, disability (SSDI), or Supplemental Security Income (SSI) benefits, by the end of this you should have a clear picture of how the 2026 rise affects you.


A Quick Summary of the 2026 Increase

  • The SSA announced that benefits under Social Security (OASDI) and Supplemental Security Income (SSI) will increase by 2.8% for 2026.

  • This applies to nearly 71 million Social Security beneficiaries starting in January 2026, and about 7.5 million SSI recipients, whose increase begins December 31, 2025.

  • On average, retirees collecting Social Security retirement benefits will see their monthly benefit rise by around $56.

  • Other key numbers: the maximum earnings subject to Social Security tax will rise to $184,500 in 2026 (up from $176,100 in 2025). The earnings-test threshold (for those working while receiving benefits) also increases.


Why the Announcement Was Delayed


Typically, the SSA announces the COLA in mid-October. This year the announcement was delayed due to a federal government shutdown which delayed the release of the BLS inflation data.


The delay didn’t change the amount (2.8%) but did push out communications to beneficiaries, which caused some uncertainty.


Historical Context


  • The 2025 COLA was 2.5%.

  • Over the last decade the average annual COLA has been about 3.1%.

  • In 2022 and 2023 we saw higher increases (5.9% in 2021, 8.7% in 2023) due to elevated inflation. But inflation has cooled, resulting in a smaller increase this time.


What the 2.8% Increase Really Means for You


For Typical Retirees

If the average retired worker benefit was about $2,008 in August 2025, then a 2.8% rise would increase that benefit by around $56 per month.

It’s important to understand this is an average. Those collecting higher or lower benefits will see different dollar-amount increases.


For SSI Recipients

SSI payments will also increase by 2.8%, effective with payments made December 31, 2025.


For Those Still Working & Receiving Benefits

If you work while receiving Social Security retirement benefits, the earnings limits will change in 2026:


  • Under full retirement age: the exempt amount (before benefit withholding) rises to $24,480 per year ($2,040/month) in 2026.

  • Year you reach full retirement age: the limit becomes $65,160 for 2026.


Impact on Married Couples & Others

Married couples collecting Social Security will see increases, too, though the average for couples will differ from single retirees. Some reports estimate the married couples’ average benefit for 2026 could hit ~$3,200 per month (up from ~$3,120) with the new COLA.


Why Many Experts and Advocates Say 2.8% May Not Be Enough

Inflation vs. Costs for Seniors

While 2.8% may seem reasonable, for many seniors the cost increases they face (especially in healthcare, housing, utilities) exceed 2.8%. For example:


  • Medical care costs increased ~4% year-over-year in one report.

  • Housing, utilities and other essentials often rise faster than general CPI.


Medicare Premiums and Other Offsets

One of the big concerns: the increase in the COLA may be offset (or even wiped out) by higher costs that are automatically deducted from benefits, notably the Medicare Part B Premium. If that premium rises significantly in 2026, it will reduce the net gain.


Purchasing Power Over Time

Even with COLAs every year, many older Americans have seen a decline in real purchasing power (the value of their benefit vs. what it buys). Analysts note that over decades insufficient COLAs + rising out-of-pocket costs have eroded gains.


Some Groups Get Less

Not everyone gets the full 2.8% bump. For example, some federal retirees under certain retirement systems will see a smaller “diet” COLA (e.g., 2.0%) rather than the full amount.


Program Solvency & Future Risk

Beyond the immediate raise, questions continue about the long-term solvency of the Social Security Trust Fund, which may factor into future benefit growth or policy changes. While this year’s raise is modest, uncertainty looms.


Practical Steps: What You Should Do Now


Check Your Benefit Notice

The SSA begins sending out COLA notices in early December to beneficiaries. If you have a “my Social Security” online account, you can check your personalized new benefit amount sooner.


Budget for the Increase — And Beyond

Use the 2.8% raise as a planning tool:

  • Increase your planned monthly benefit amount by that percentage to estimate your 2026 income from Social Security.

  • But do not assume that all your costs will only rise 2.8%; plan for the possibility that your expense inflation might be higher.

  • Look at what your health care premiums (Medicare, Medigap, etc) will be and how they might affect your net benefit.


Review Your Work & Income Strategy

If you’re working while collecting benefits:

  • Re-check the earnings limit for 2026 ($24,480) and how close you are to it.

  • If you are approaching full retirement age, know the $65,160 limit for 2026.

  • Consider whether delaying additional earnings makes sense, especially if you expect benefits to increase further by deferring your Social Security claim.


Consider Your Overall Retirement/Income Strategy

Social Security is just one piece of your retirement income puzzle. With a modest COLA:

  • Revisit other income sources (pension, savings, investments) and how they keep pace with inflation.

  • Consider whether your spending, portfolio, or withdrawal strategy needs adjustment given expected cost rises.

  • Stay informed about changes in healthcare costs, housing, utilities and other major expense categories.


Stay Alert to Future COLA & Benefit Changes

  • Monitor annual COLA announcements—2.8% in 2026 doesn’t guarantee anything for 2027 or beyond.

  • Keep an eye on policy proposals that might affect how COLA is calculated (for example, some advocate switching to CPI-E (for elderly) rather than CPI-W).

  • Be aware of possible changes to Social Security law, Medicare premiums, tax policy, and benefit-eligibility rules that could impact your net income.


Beyond the Numbers: Big Picture Implications


Why the Rise Matters

The annual COLA is more than just another raise—it reflects an ongoing commitment to adjust benefits in line with economic conditions. The SSA itself states that the COLA is “a vital part of how Social Security delivers on its mission.”

For many beneficiaries, even a few dozen extra dollars per month can make a meaningful difference in covering essentials like food, transportation, utilities and medical expenses.


The Symbolism of the Delay

The fact that the 2026 announcement was delayed highlights how vulnerable the system is to external factors (such as government shutdowns) and how timing matters for household planning. The delay may have prompted greater concern among beneficiaries about their upcoming income.


The Challenge of Cost Growth

While the COLA mechanism exists, the question remains: does it fully protect beneficiaries against rapidly rising specific costs? Many experts argue that it doesn’t — especially because retirees’ spending patterns differ from general workers (e.g., higher share of healthcare/medication, housing costs, etc.). The use of CPI-W may not reflect those patterns well.


Policy & Political Dimensions

  • Advocates are pushing for the COLA calculation to switch to a measure that better reflects older Americans’ spending (such as CPI-E).

  • Some analysts note that modest COLAs in the face of large cost pressures could lead to increased poverty risk among seniors, or require larger withdrawals from savings.

  • The long-term solvency of the Social Security program continues to influence discussions about benefit levels, retirement age, tax rates and modernization.


FAQs About the 2026 COLA


Q: When will I see the increase on my Social Security check?A: For most retirement, survivor or disability beneficiaries, the increase takes effect in the January 2026 benefit payment. For SSI recipients, the increase begins with the December 31, 2025 payment.

Q: Is 2.8% guaranteed every year?A: No. The increase depends on the CPI-W change over the designated period. If inflation is very low (or negative), the COLA can be very small or even zero.

Q: Does this increase apply to Medicare premiums and other benefit deductions?A: The 2.8% applies to the gross benefit. However, your net benefit may be reduced by higher Medicare premiums, other deductions, or taxation of benefits. So while your benefit rises, your net “take-home” may rise less.

Q: If I’m still working, does this affect me?A: Yes — you still need to consider the earnings limits for individuals not yet at full retirement age; for 2026 that is $24,480 per year if you are under full retirement age the whole year. With respect to reaching full retirement age, there is a higher limit ($65,160) above which deductions apply.

Q: Why is 2.8% lower than some previous years like 2022-2023?A: Because inflation has cooled from the high levels seen during the pandemic era. Earlier years had larger spikes in inflation, triggering larger COLAs. The COLA reflects the inflation metric, not a targeted “seniors’ cost” adjustment.


Final Thoughts – What Should You Do Now?

  • Recognize the 2.8% increase is real and will boost your benefits starting in 2026. Plan your budget accordingly.

  • But don’t assume it will fully offset cost increases: review your spending, especially in major categories like healthcare, housing and utilities.

  • If you work while receiving benefits, review how the new earnings limits affect you and whether you should adjust your work-income strategy.

  • Keep in mind: this is just one year’s adjustment. Regularly revisit your retirement income strategy, other savings/investment sources, and how they perform relative to inflation.

  • Stay informed about any policy changes that may affect Social Security or related benefits in the future.


In summary: The 2026 COLA for Social Security benefits is 2.8%, representing a modest increase from previous years. While it will help many beneficiaries, it may not be enough by itself to keep pace with the specific cost pressures older Americans face. Knowing the details, planning ahead and adjusting your overall income strategy are key.



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