Social Security COLA 2026: payments to go up 2.8% as inflation cools

The benefits increase for nearly 71 million Social Security recipients will go into effect beginning in January. And increased payments to nearly 7.5 million people receiving Supplemental Security Income will begin on Dec. 31.

Friday’s announcement was meant to be made last week but was delayed because of the federal government shutdown.

The cost-of-living adjustment, or COLA, for retirees and disabled beneficiaries is financed by payroll taxes collected from workers and their employers, up to a certain annual salary, which is slated to increase to $184,500 in 2026, from $176,100 in 2025.

Recipients received a 2.5% cost-of-living boost in 2025 and a 3.2% increase in their benefits in 2024, after a historically large 8.7% benefit increase in 2023, brought on by record 40-year-high inflation.

The smaller increase for 2026 reflects moderating inflation. The agency will notify recipients of their new benefit amount by mail in early December.

Some seniors say the increase isn’t enough

Some seniors say the cost-of-living adjustment won’t help much in their ability to pay for their daily expenses. Linda Deas, an 80-year-old Florence, South Carolina, resident said “it does not match the affordability crisis we are having right now.”

Deas, a retired information systems network operations specialist, moved to South Carolina from New York in 2022 to be closer to family. She says her monthly rent has increased by $400 in the past two years.

She listed other items that have become more expensive for her in the past two years, including auto insurance and food. “If you have been into the supermarkets lately you will notice how prices are going up, not down,” she said.

Deas is not alone in feeling that costs are getting out of control. Polling from the AARP shows that older Americans are increasingly struggling to keep up in today’s economy. The poll states that only 22% of Americans over age 50 agree that a COLA of right around 3% for Social Security recipients is enough to keep up with rising prices, while 77% disagree. That sentiment is consistent across political party affiliations, according to the AARP.

In Deas’ case, the MIT Living Wage Calculator estimates that an adult living alone in Florence, South Carolina, would spend per year $10,184 for housing, $3,053 for medical expenses and $3,839 for food.

AARP CEO Myechia Minter-Jordan said the COLA is “a lifeline of independence and dignity, for tens of millions of older Americans,” but even with the annual inflation-gauged boostin income, “older adults still face challenges covering basic expenses.”

Social Security Administration Commissioner Frank Bisignano said in a statement Friday that 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.”

Emerson Sprick, the Bipartisan Policy Center’s director of retirement and labor policy, said in a statement that cost-of-living increases “can’t solve all the financial challenges households face or all the shortcomings of the program.”

The agency has been in turmoil in recent months

The latest COLA announcement comes as the Social Security Administration has been navigating almost a year of turmoil, including the termination of thousands of workers as part of the Trump administration’s efforts to shrink the size of the federal workforce. Trump administration officials have also made statements they later walked back that raised concerns about the future of the program.

Treasury Secretary Scott Bessent said in July that the Republican administration was committed to protecting Social Security hours after he said in an interview that a new children’s savings program President Donald Trump signed into law “is a back door for privatizing Social Security.”

And in September, Bisignano had to walk back comments that the agency is considering raising the retirement age to shore up Social Security. “Raising the retirement age is not under consideration at this time by the Administration,” Bisignano said at the time in an e-mailed statement to The Associated Press.

“I think everything’s being considered, will be considered,” Bisignano said in the statement when asked whether raising the retirement age was a possibility to maintain the old age program’s solvency.

Efforts to boost benefits for seniors

In addition, the Social Security Administration faces a looming bankruptcy date if it is not addressed by Congress. The June 2025 Social Security and Medicare trustees’ report states that Social Security’s trust funds, which cover old age and disability recipients, will be unable to pay full benefits beginning in 2034. Then, Social Security would only be able to pay 81% of benefits.

Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67.

While a permanent solution for shoring up the benefits program has not been passed into law, both the Trump and Biden administrations have recently signed into law new benefits for retirees, which are expected to boost their finances.

The Trump administration, as part of Republicans’ tax and spending bill, gave tax relief to many seniors through a temporary tax deduction for seniors aged 65 and over, which applies to all income — not just Social Security. However, those who won’t be able to claim the deduction include the lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold.

Additionally, former President Joe Biden in 2024 repealed two federal policies — the Windfall Elimination Provision and the Government Pension Offset — that previously limited Social Security payouts for roughly 2.8 million people, including largely former public workers.

These measures have accelerated the insolvency of the old-age benefits program.

Sprick at the Bipartisan Policy Center said “there have been longstanding questions about whether benefits are adequate for low-income seniors, which should inspire urgency among policymakers to work toward broader reforms instead of ignoring Social Security’s long-term solvency.”