Inflation refers to the steady rise in the cost of goods and services over time. It affects everyone, regardless of income, but those living on a fixed income—like recipients of Social Security—feel the effects most strongly. To help protect beneficiaries from losing purchasing power, the Social Security Administration (SSA) introduces a Cost-of-Living Adjustment (COLA) each year.
How COLA Works
The COLA is designed so that benefit payments adjust upward when inflation rises, helping recipients maintain their standard of living. Since 1975, the SSA has calculated the COLA by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the months of July, August and September from one year to the next. If there is an increase in CPI-W, that percentage becomes the COLA for the next benefit year.
The 2025 and 2026 COLA: Key Numbers
In 2025, seniors nationwide received a 2.5% increase in their Social Security benefits.
On October 24, the SSA announced the 2026 COLA will be 2.8%—slightly higher than the prior year.
While 2.8% is roughly average historically, when compared with the past decade’s adjustments, it could be seen as somewhat below average.
What Seniors Should Expect from the 2026 COLA
With the 2.8% increase coming into effect with the January 2026 benefit, here’s how the numbers break down for average benefit types (based on August 2025 data):
- Retired Workers: Average benefit ≈ $2,008.31 → With 2.8% increase, becomes ≈ $2,064.54 per month.
- Spousal Benefits: Average ≈ $954.93 → Increase of ≈ $26.74 → New ~ $981.67.
- Survivor Benefits: Average ≈ $1,575.30 → Increase of ≈ $44.11 → New ~ $1,619.41.
- Disability Benefits: Average ≈ $1,445.72 → Increase of ≈ $40.48 → New ~ $1,486.20.
Medicare Premiums Are Rising Too
Many Social Security recipients aged 65+ have their Medicare premiums automatically deducted from their benefit checks. While Medicare Part A is generally free, Part B has a premium. In 2025, the Part B premium was $185 per month. Reports indicate that in 2026 it is projected to rise by 11.6%, which would move the premium to around $206.50.
Given the average retiree benefit (≈ $2,008/month), deducting a $206.50 Part B premium leaves around $1,823 per month. After the January 2026 COLA, the benefit rises to ~$2,064, but then the higher premium brings the remaining check down to approximately $1,858 monthly.
The Bottom Line: What It Really Means for Seniors
Although the 2026 COLA of 2.8% appears like a solid boost, once the increasing Medicare Part B premium is factored in, the net increase for many seniors is much smaller—around $35 extra per month, despite the benefit increase being about $56. Because of premiums and other deductions, much of the nominal COLA gain is absorbed before the money reaches recipients’ bank accounts.
Conclusion
For seniors relying on fixed incomes, the annual COLA from the SSA is a key safeguard against inflation’s impact. However, in 2026 the modest 2.8% increase will be partially offset by a substantial Medicare Part B premium hike. So although benefit payments will rise, the actual additional amount many individuals take home will be significantly lower than the headline figure. It’s important for beneficiaries to understand how deductions and premium increases affect their net income to stay financially informed and prepared.
FAQs
What is the COLA and how often is it applied?
The Cost-of-Living Adjustment (COLA) is an annual increase in Social Security benefits meant to keep up with inflation. It’s applied each January once the SSA calculates the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) over the previous July-September period.
Why does the COLA rise but the increase in my check is small?
Even though your benefit may increase by a certain percentage, deductions like higher Medicare Part B premiums and other automatic withholdings can absorb much of the increase. As a result, the net gain in what you receive may be significantly less than the gross adjustment.
How much will my Social Security benefit increase in 2026?
For the 2026 benefit year, the COLA is set at 2.8%, meaning most Social Security payments will rise by that percentage starting with the January 2026 check. The exact dollar increase depends on your current benefit amount.
