The Social Security Administration said Friday that benefits will rise by 2.8% in 2026, marking a modest boost for more than 70 million Americans - but one that many retirees say still falls short of covering rising living costs.
The cost-of-living adjustment (COLA), based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), will lift the average monthly benefit for retired workers by about $56 to an estimated $2,071 starting in January, the agency said. It is a slight improvement over the 2.5% adjustment in 2025, but far below the 8.7% jump that followed pandemic-era inflation in 2023.
"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," said Social Security Administration Commissioner Frank Bisignano. "It continues to provide a foundation of security."
Roughly 75 million Americans receive Social Security or Supplemental Security Income payments, with nearly 40% of older Americans depending on those benefits as their primary source of income, according to the AARP.
Still, many beneficiaries say the latest increase won't be enough to offset rising expenses. Nancy Altman, president of Social Security Works, said in a statement that the 2026 adjustment will be largely eaten up by higher Medicare premiums. The Medicare trustees have projected that the standard Part B premium will rise 11.6% to $206.50 per month, compared with $185 this year.
For retirees on fixed incomes, that increase could erase nearly half of their COLA gains. "For some, the premium increase would consume their entire COLA," Altman said.
Some seniors say the annual adjustments fail to keep pace with their true costs of living, particularly for health care and housing. "The CPI for working Americans doesn't quite capture what the spending patterns are for older Americans," said Joel Eskovitz, senior director of Social Security at AARP's Public Policy Institute. "It's close, but there are just different things that working Americans spend on than retired Americans."
A study from The Senior Citizens League, a nonpartisan advocacy group, found that Social Security benefits lost roughly 20% of their buying power between 2010 and 2024. Retirees who began collecting benefits in 2010 would need an additional $370 a month, or about $4,443 a year, to restore their lost purchasing power, the group said.
For retirees like Sam Ciraulo, a 68-year-old former adjunct professor living in Sacramento, the COLA bump feels symbolic. "It won't be enough to buy a tank of gas," he said. Ciraulo receives about $1,400 a month in Social Security and expects only a $40 increase next year - about half of which will go toward higher Medicare premiums. He said he already relies on local nonprofits to help pay for utilities tied to his medical condition. "When I see the electricity bill, when I go to pay it every month, I have to think about what I'm going to cut in order to be able to pay that bill," he said.
The Social Security Administration said beneficiaries will begin receiving their increased payments in January 2026, with exact dates depending on their birthdays. Notices detailing new payment amounts will be mailed in December, though recipients can opt to view them online through their My Social Security accounts.
