Social Security Raises Benefits 2.8% for 2026: The Social Security Administration (SSA) announced a 2.8% cost-of-living adjustment (COLA) for 75 million Americans in 2026 , an increase from this year’s 2.5%. This adjustment ensures that Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation, as everyday living costs continue to rise across the country.
The increase, which comes into effect in January 2026, will boost the average monthly Social Security benefit by around $56. While this may bring some relief for retirees and beneficiaries, experts note that rising Medicare premiums could offset part of the gain.
What Is COLA and Why Does It Matter?
The Cost-of-Living Adjustment (COLA) is an annual increase applied to Social Security and SSI payments to preserve beneficiaries’ purchasing power amid inflation. COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) a measure of price changes in goods and services published by the U.S. Bureau of Labor Statistics.
For 2026, SSA confirmed that the 2.8% adjustment stems from an increase in CPI-W during the third quarter of 2025. SSA Commissioner Frank J. Bisignano stated, “Social Security is a promise kept, and this COLA reflects the commitment to ensure benefits match the economic realities retirees face today.”
Key Social Security Benefit Changes for 2026
When Will Recipients See the Increase?
The 2.8% COLA will apply to:
- Social Security benefits: Payable from January 2026 onward.
- Supplemental Security Income (SSI): Higher benefits begin on December 31, 2025, as SSI payments are disbursed a day earlier due to the weekend and holiday schedule.
Overall, nearly 71 million Social Security and 7.5 million SSI recipients will benefit from the adjustment.
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Social Security Tax and Contribution Rates
The Social Security tax rate remains unchanged for 2026:
- Employees: 7.65% (6.2% for Social Security + 1.45% for Medicare)
- Self-Employed: 15.30%
Additionally, workers earning above $200,000 (or $250,000 for married couples) will continue to pay the 0.9% Medicare surtax on earnings above those thresholds.
How Much Will Your Social Security Payment Increase?
- The average retirement benefit is expected to increase from $2,015 to $2,071 per month.
- An aged couple, both receiving Social Security, will see their combined payment rise by $88 monthly to $3,208.
- A widowed parent with two minor children will see an increase from $3,792 to $3,898.
- For disabled workers, payments will rise from $1,586 to $1,630 monthly.
However, rising Medicare Part B premiums, projected to increase by $21.50 (11.6%) to $206.50 per month, may reduce net monthly gains for retirees, consuming nearly 40% of the benefit boost.
How and When Will Beneficiaries Be Notified?
The SSA will start mailing COLA notification letters in early December 2025, outlining:
- Individual benefit increases
- Updated payment amounts
- Effective dates
Beneficiaries can also access their COLA notices online via their ‘my Social Security’ accounts at www.ssa.gov/myaccount.
Digital Access Benefits:
- Faster notifications
- Tracking benefit updates
- Receiving alerts via text or email
To shift to online-only notifications, users must “opt out” of paper letters by November 19, 2025.
COLA Calculation
The Social Security Act mandates that COLA adjustments are determined annually by comparing the CPI-W from the third quarter of the current year to that of the previous year. If consumer prices rise, SSA applies a proportional increase to benefit amounts. If inflation remains stable or decreases, no adjustment is made. For 2026, consumer prices rose steadily due to higher housing and healthcare costs, driving the COLA to 2.8%.
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Impact on Retirees
While a higher COLA offers relief, senior advocacy groups highlight its limitations:
- Rising healthcare costs and rent continue to erode real purchasing power.
- Many retirees depend on Social Security for up to 90% of their income.
- Healthcare expenses for Medicare enrollees can consume over 13% of household budgets.
FAQs Social Security 2026 COLA Increase
From January 2026 for Social Security and December 31, 2025, for SSI payments.
The average increase is $56 per month, bringing average benefits to $2,071.
The maximum earnings subject to payroll taxes will rise to $184,500.
For retirees younger than full retirement age, the income limit is $24,480 annually, with $1 deducted for every $2 earned beyond the limit.
Yes. The projected $21.50 premium hike could reduce the net monthly gain for most retirees.