The Social Security Administration (SSA) on Friday announced that its cost-of-living adjustment (COLA) will rise 2.8% in 2026. Among the 53 million Americans who receive Social Security benefits in retirement, that will translate to an additional $56 per month.
The average monthly payment to retirees will rise to $2,056, the SSA reported. The 2.8% increase for next year outstrips this year’s 2.5% bump — the smallest in four years — and is higher than the figure of 2.7% projected by The Senior Citizens League in August.
The yearly COLA is designed to keep up with the pace of inflation. The newest Consumer Price Index report from the U.S. Bureau of Labor Statistics, also released Friday, showed that prices for goods and services increased 3% year over year in September. It was the third straight month of rising inflation, and the 3% gain was the highest growth recorded since January 2025.
Now in its 90th year, Social Security continues to face an uncertain future as the safety net program is projected to become insolvent by 2033. The SSA estimates a 21% across-the-board cut to benefits at that time unless Congress approves a full funding plan.
Estimates released last year by the American Enterprise Institute showed that a 21% decline in benefits would double the elderly poverty rate while slashing the median household income for seniors by 14%.
Last month, Sen. Ruben Gallego (D-Ariz.) introduced the You Earned It, You Keep It Act. The proposal would eliminate federal taxes on Social Security benefits and expand the payroll tax to include incomes above $250,000. Rep. Angie Craig (D-Minn.) introduced a companion bill in the House of Representatives.
President Donald Trump claims he ended taxes on Social Security through the One Big Beautiful Bill Act. That legislation, which passed in July, allows nearly 90% of beneficiaries to no longer pay federal income taxes on their benefits through an increased deduction of $6,000 for taxpayers ages 65 and older.
With the federal government shutdown reaching nearly a month in length, Social Security recipients are still receiving their monthly checks. But other services through the SSA, including the processing of applications and resolving overpayments, have been slowed or paused.
In May, the Urban Institute published data that showed a dramatic spike in the number of Social Security applications during the first 10 months of the current fiscal year. The 276,000 additional applicants during that time represented a 13% year-over-year increase.
A source at the Urban Institute told The New York Times that the trend was “worrisome” as it indicated more Americans were taking benefits early. The best practice typically means waiting until age 70 to initiate payments and maximize benefits.
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