How much is your Social Security cost-of-living increase? See the new average
The annual cost-of-living adjustment for the 71 million Americans who receive Social Security and Supplemental Security Income is now official.
The Social Security Administration said on Oct. 24 that payments will rise 2.8% in 2026, which means about $56 more in average in your pocket.
Analysts say rising inflation and Medicare costs make the COLA insufficient, and that it doesn’t reflect the reality facing retirees in the United States.
The COLA is slightly higher than the 2.7% estimate from analysts at the Senior Citizens League (TSCL). It’s also higher than the 2.5% beneficiaries received in 2025, the smallest COLA since 2021.
The COLA is calculated using the average annual inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers for July, August and September.
The wait in releasing September data caused the COLA announcement delay, which had originally been scheduled for Oct. 15.
How much COLA is enough?
Inflation in September rose less than expected. It was 3%, up from August’s 2.9% and slightly below the 3.1% analysts had forecast for the last month of the quarter used to calculate the COLA.
Still, this isn’t good news for retirees facing high costs for essentials, especially groceries, whose prices in some cases have surged by 20%. Inflation has been rising since the start of the year.
TSCL, a nonpartisan organization that advocates for older Americans, said changes in economic policy under the Trump administration — higher trade tariffs, new tax exemptions for higher-earning seniors, and stricter immigration enforcement —have influenced the rise in inflation.
A TSCL study from 2025 shows 73% of older Americans rely on Social Security for more than half their income. About 29% depend entirely on Social Security benefits to get by. On average, a senior lives on less than $2,000 a month, according to figures the organization compiles annually.
“The 2026 cost-of-living adjustment will negatively affect older Americans. Year after year, they warn that the meager increases to Social Security won’t be enough, and the Census Bureau estimates around 10% of Americans of retirement age live in poverty,” said Shannon Benton, executive director of TSCL. “Our research suggests the figure could be higher.”
Medicare premiums cut into COLA increase
One factor that hits retirees each year and significantly reduces the effective inflation adjustment is the rise in Medicare premiums. The cost of Medicare Part B, which covers doctor visits and outpatient services, is deducted automatically from benefits. While the exact 2026 increase won’t be known until November, Medicare trustees estimate a $21.50 rise, meaning retirees would pay $206.20 per month in 2026, up from $185 this year.
Next year, “the increase in Medicare premiums alone could completely wipe out the COLA for many older adults in 2026,” said Mary Johnson, an independent Social Security and Medicare policy analyst.
In 2026, the annual Part B deductible would rise $31 to $288, up from $257 in 2025 and $240 in 2024.
Only certain beneficiaries whose monthly Social Security benefit is $796.29 or less would be protected from the full premium increase by a federal provision that prevents certain Medicare beneficiaries from having their net Social Security check decrease year-over-year due to a Medicare Part B premium increase.
When the 2026 COLA takes effect
About 7.1 million Supplemental Security Income beneficiaries, intended for those 65 and older and people with limited resources, receive the payment increase first. It will be deposited into their bank accounts on Dec. 31 to align with the Social Security Administration’s payment schedule, which moves it earlier because Jan. 1 is a federal holiday.
Other beneficiaries will begin receiving the increase in January, when other changes take effect, such as the rise in the maximum taxable earnings subject to the Social Security tax, from $176,100 to $184,500.
Calls to change how COLA is calculated
Several analysts and elder-advocacy groups are calling for a change in how the COLA is calculated because the current adjustment does not reflect retirees’ realities. Many also receive supplemental assistance (SSI) because their retirement income is too low.
The Senior Citizens League said a simple option to reform Social Security COLAs would be to calculate them using the Consumer Price Index for the Elderly instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers, which the government currently uses to compute COLAs.
The “Elderly Index” is designed specifically to reflect the spending habits of older Americans. As a recent TSCL analysis shows, it tends to be higher than the general Consumer price Index about 69% of the time, which translates into thousands of dollars in lost benefits for older adults.
This story was originally published October 24, 2025 at 2:56 PM.
