Key Points and Summary – The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, an increase that will provide the average beneficiary an extra $56 per month.
-The announcement, delayed by the government shutdown, was immediately criticized by advocacy groups like the Senior Citizens League, which argue the increase is too low to cover the rising costs seniors face.
-The news comes as the program’s trust fund faces depletion by 2034, prompting proposals to cap future COLA increases for high-income beneficiaries.
Social Security COLA for 2026 Is 2.8%
Every year, Social Security recipients closely watch for the announcement of the Social Security Cost of Living Adjustment (COLA), which uses an inflation-based formula to determine how large an increase in benefits recipients will get.
The 2025 announcement has been delayed due to the government shutdown, but it finally arrived on Friday morning.
The COLA adjustment for 2026 will be 2.8 percent, the Social Security Administration announced on Friday. The change will affect about 75 million Americans.
“The 2.8 percent cost-of-living adjustment (COLA) will begin with benefits payable to nearly 71 million Social Security beneficiaries in January 2026,” SSA said. “Increased payments to nearly 7.5 million SSI recipients will begin on December 31, 2025. (Note: Some people receive both Social Security and SSI benefits.)”
History of COLA
“The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation,” SSA said on its website.
According to a chart released by SSA, the 2.8 percent increase is larger than last year’s number of 2.5 percent, although it’s much smaller than the 8.7 percent figure in 2023 or the 5.9 percent in 2022, both of which were delivered during the post-COVID high-inflation environment.
The majority of increases over the years have been under 5 percent, while the COLA was by double digits in 1980 and 1981. COLA has never gone negative, although some years have had no adjustment at all, including 2010, 2011, and 2016. COLA was only 0.3 percent in 2017.
SSA also said that the average COLA increase has been 3.1 percent for the last decade. Over two decades, per the Senior Citizens League, the average increase has been 2.6 percent.
“Social Security is a promise kept, and the annual cost-of-living adjustment is one way we are working to make sure benefits reflect today’s economic realities and continue to provide a foundation of security,” Social Security Administration Commissioner Frank J. Bisignano said in the SSA release. “The cost-of-living adjustment is a vital part of how Social Security delivers on its mission.”
Beneficiaries will receive a notice in December, notifying them of the change.
How Much More Money Does That Mean?
Per CNBC, which cited SSA’s own data, the average Social Security beneficiary’s retirement benefits will increase by $56 per month, starting in January. CNBC added that the increase was about in line with estimates from analysts ahead of the announcement, based on data about inflation.
As for how much more money each beneficiary will receive, that’s more complicated.
“The dollar amount of the COLA varies according to one’s benefit level,” the New York Times said, after the COLA number was announced. “That means the net increase in benefits will depend on how much Medicare’s Part B premium goes up, which is deducted from the Social Security benefits of most retirees and covers doctor visits and other outpatient care.”
Reactions to the Number
The Senior Citizens League, which follows the Social Security benefits conversation throughout the year and sometimes makes predictions about what it might come in at, reacted to the release of the COLA number by arguing for higher benefits and for a push for reforms that would safeguard Social Security’s long-term future.
“The 2026 COLA is going to hurt for seniors. Year after year, they warn that Social Security’s meager increases won’t be enough, and the Census Bureau estimates that about 10 percent of retirement-age Americans live in poverty,” TSCL Executive Director Shannon Benton said in a statement Friday.
“However, our research suggests that the number may be higher. It’s about time our elected representatives show up for seniors, or else seniors won’t show up for them at the voting booth.”
The Senior Citizens League also called for changes to how COLA is calculated.
“Seniors, and The Senior Citizens League, call on Congress to take immediate action to strengthen COLAs to ensure Americans can retire with dignity, such as instituting a minimum COLA of 3 percent and changing the COLA calculation from the CPI-W to the CPI-E,” Benton said in the organization’s release.
Can Social Security Be Saved?
The other big question is the long-term viability of Social Security. According to the latest Trust Fund report, released this summer, the program will have “enough dedicated revenue to pay all scheduled benefits and associated administrative costs until 2034,” which is one year earlier than projected last year.
At that point, benefits would not go to zero, but rather to 81 percent. That is, unless Congress takes action to either shore up the program’s finances or adjust the formula of how benefits are calculated.
One option would be to cap COLA raises, as argued in The Hill this week. That piece cited a recent report by the Committee for a Responsible Federal Budget.
Capping CPI?
“Social Security is rapidly approaching insolvency. The retirement trust fund is seven years from exhaustion, and the theoretically combined trust funds are nine years from running out,” the CRFB report says. “Without legislative action, retirees will face an estimated 24 percent across-the-board benefit cut in late 2032. Restoring long-term solvency will require slowing the growth of benefits, raising revenue, or some combination.”
Options include switching to chained-CPI to calculate the COLA each year, or possibly to means-test the adjustments, to “eliminate increases in years beneficiaries have high incomes.”
According to the Committee’s Trust Fund Solutions Initiative white paper, the plan would work like this: “All beneficiaries would continue to receive an annual COLA, but that COLA would be limited in size for those with the largest benefits (and highest lifetime income). A COLA cap could be enacted in place of or in combination with other COLA changes.”
Under this proposal, the Committee says, the “progressivity” of Social Security would increase, while setting the cap at the 75th percentile retiree would save $115 billion over a decade and close one-tenth of the insolvency gap. Setting it even higher would close the gap even further.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist, and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, national security, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
