Social Security’s Cost-Of-Living Adjustment Hits 2.8%—Here’s What To Know

Topline

The Social Security Administration, marred by delays during a federal government shutdown, announced on Friday a 2.8% cost-of-living adjustment for 2026, above estimates from advocacy groups as benefits keep pace with inflation.

Experts forecast a higher adjustment for next year as inflation has yet to cool.

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Key Facts

The SSA’s cost-of-living adjustment, or COLA, represents the annual increase to monthly Social Security payments the SSA calculates based on the Bureau of Labor Statistics’ monthly consumer price index, which measures the monthly change to inflation.

The average retired worker’s benefit will increase by about $56 to $2,064 from $2,008 with the 2.8% COLA, above projections from the Senior Citizens League, a nonpartisan advocacy group.

Other payments affected by the COLA include Social Security Disability Insurance, Supplemental Security Income, Medicare and the Supplemental Nutrition Assistance Program.

Independent Social Security analyst Mary Johnson told CNBC it was likely the adjustment would be 2.8% once September’s inflation data was accounted for, noting a 2.7% adjustment would be the result of “virtually no inflation growth at all” during the month.

The adjustment will be added to checks for Social Security beneficiaries starting January 2026.

Big Number

74.5 million. That’s the number of Americans who receive Social Security or SSI, or both, as of August, according to the SSA.

Surprising Fact

A 2.5% COLA in 2025 represented the lowest increase to benefits since a 1.3% rate in 2021 as the adjustment steadily declined from 8.7% in 2023, the largest increase since the 1980s, according to SSA data.

Key Background

Friday’s announcement by the SSA was postponed earlier this month as a weekslong government shutdown continues. The COLA tends to coincide with CPI data from the BLS, which similarly postponed its inflation reports this month, though some employees with the SSA and BLS were recalled to help calculate Social Security payments, which are required to be published by Nov. 1 the Wall Street Journal reported. Annual COLA has been added to Social Security payments each year since 1975, and is intended to reflect the changing cost of living over one year. The payments are largely given to American retirees, and roughly 58% of retirees in the U.S. rely on Social Security as a “major source” of income, according to Gallup. Retirees have grown increasingly worried that President Donald Trump’s tariffs would prompt inflation to rise beyond what COLA could cover, according to a poll from the Nationwide Retirement Institute. About half of retirees surveyed by Nationwide said they were “terrified” about the potential impact tariffs could have on their retirement income. Advocacy groups like the Senior Citizens League have previously argued that COLAs have “gradually become less likely to beat inflation over time,” claiming the government has failed to adjust to rising food, healthcare and housing costs.