2026 Social Security COLA Set at 2.8% — Here's How Much More You'll Take Home

Millions of Americans will see their Social Security payments increase next year. The US Social Security Administration has confirmed a 2.8 per cent cost-of-living adjustment (COLA) for 2026 to keep pace with rising prices, affecting nearly 71 million beneficiaries.

The same adjustment will apply to about 7.5 million Supplemental Security Income (SSI) recipients, whose higher payments will begin in December 2025.

According to a survey by AARP (formerly the American Association of Retired Persons), Social Security remains the main source of income for around 40 per cent of older Americans. The increase will offer only a modest but welcome buffer against stubborn inflation.

How Much More Will You Get?

To estimate the new amount, multiply your current monthly benefit by 0.028. For example, someone receiving $2,000 (£1,502) a month in 2025 would see an increase of about $56 (£42), bringing the total to roughly $2,056 (£1,544).

Actual payments will vary depending on deductions for Medicare and any federal tax withholding. Beneficiaries who choose to have tax withheld can select rates of 7 per cent, 10 per cent, 12 per cent or 22 per cent, depending on income.

The Social Security Administration will send out individual adjustment letters in early December detailing each person's new benefit. Those who prefer digital alerts can opt in through their My Social Security account by 19 November 2025.

Most recipients will receive their first 2026 COLA-adjusted payment in January. Payment dates depend on the beneficiary's birth date:

• Birthdays 1 – 10: paid on the second Wednesday of the month
• Birthdays 11 – 20: paid on the third Wednesday
• Birthdays 21 – 31: paid on the fourth Wednesday

SSI recipients will receive their adjusted payment slightly earlier, on 31 December 2025.

A Promise of Security Amid Rising Costs

The annual COLA acts as a safeguard to ensure beneficiaries can keep up with inflation. It 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.

For 2026, the 2.8 per cent increase reflects the moderate inflation seen since the volatile post-pandemic period.

The sharpest recent adjustment came in 2023, when benefits jumped 8.7 per cent amid soaring prices. Since then, annual increases have returned closer to the two-decade average of 2.6 per cent.

Even so, officials say the new COLA underscores their commitment to helping older Americans stay financially afloat. For many retirees, however, higher rents, medical bills and Medicare premiums continue to erode their gains.

Medicare Part B premiums — usually deducted directly from Social Security payments — are expected to rise by 11.6 per cent in 2026, from $185 (£139) to about $206.50 (£155) a month, potentially offsetting much of the COLA for some beneficiaries.