Social Security 2026 COLA of 2.8% to Boost Average Monthly Income by $56 Amid Rising Inflation

The Social Security Administration (SSA) announced a 2.8% cost-of-living adjustment benefit for 2026. The agency estimated that the adjustment will boost average monthly income for beneficiaries by around $56 (£41.9), starting in January 2026. Note that the 7.5 million Supplemental Security Income (SSI) recipients will receive larger cheques starting on 31st December 2025.

The 2026 COLA is higher than the 2.5% benefit increase in 2025, but lower than 3.2% in 2024, 8.7% in 2023, and 5.9% in 2022.

'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,' said SSA Frank Bisignano in a press release. 'The cost-of-living adjustment is a vital part of how Social Security delivers on its mission.'

The Senior Citizen League recently said it expected the 2026 COLA to be around 2.7%. The advocacy group released the forecast based on August inflation data of 2.9%.

Inflation Rises in September

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% on a seasonally adjusted basis in September, after rising 0.4% in August, according to the US Bureau of Labor Statistics report today. Over the last 12 months, the all-items index increased 3% before seasonal adjustment, compared with 2.9% in August.

Indexes that rose over the month include shelter, airline fares, recreation, household furnishings and apparel.

The SSA estimated that monthly Social Security cheques for those 65 or older represent 30% of their income. Moreover, cheques account for 50% of the monthly income for 42% of women receiving benefits and 90% of the income for 12% of men.

Other adjustments that take effect in January are based on average wage increases. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $184,500 (£138,212) from $176,100 (£131,920), according to the SSA.

The Social Security Administration generally announces the yearly COLA on 15th October, coinciding with the release of the September Consumer Price Index data by the US Labor Department. This is because the COLA is based on Q3 inflation figures. However, the delay this year is attributable to the ongoing government shutdown.

The SSA will begin notifying people about their new benefit amount by mail starting early next month. The beneficiaries will also receive a one-page COLA notice that provides details on the exact dates and dollar amounts for the new benefit amount and any deductions. Beneficiaries who have my Social Security accounts can check their COLA notices online.

Seniors Say The Benefit Hike is Not Enough

The COLA raises benefits for nearly 75 million beneficiaries to help seniors, people with disabilities, survivors, and other recipients maintain their purchasing power as inflationary pressures push prices higher.

However, many seniors think the 2026 COLA hike is not enough. Around 77% told AARP the increase doesn't keep pace with rising prices. About 72% believe they need at least a 5% increase in Social Security benefits to overcome inflationary pressures.

'Core goods pressures have started to heat up, marking the beginning of a delayed tariff passthrough,' RBC economists recently stated in a note to clients. 'Concerningly, the breadth of inflationary pressures has widened — 45% of CPI basket items are now reporting price growth at or above 3%, compared to roughly two-thirds pre-pandemic.'