In October, the Social Security Administration (SSA) will announce the official percentage increase for the 2026 Cost of Living Adjustment (COLA), which adjusts Social Security benefits to keep pace with inflation. This adjustment is vital for recipients, as it ensures that their benefits reflect the rising costs of living, including basic services, food, and healthcare.
Understanding the COLA Increase
The COLA is a percentage increase in Social Security benefits, and it’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The SSA uses data from the third quarter of the current fiscal year, compares it to the same period from the previous year, and applies the resulting percentage increase. This helps to ensure that benefits adjust according to inflation and help beneficiaries maintain their purchasing power.
For 2026, estimates from the Senior Citizens League (TSCL) suggest that the COLA increase will be about 2.5%. However, this is not an official figure, and we’ll have to wait until October 2025 for the SSA to announce the official COLA percentage, which will take effect in January 2026.
Who Will Benefit from the COLA Increase?
The COLA adjustment impacts various Social Security benefits, including:
Retirees: Monthly payments for retirees will likely increase based on the COLA. For example, a retiree currently receiving $1,976 per month could see their benefit rise to about $2,025. Couples receiving $3,089 might see an increase to around $3,166.
Supplemental Security Income (SSI): Individuals receiving SSI may also see an increase. A single recipient’s monthly benefit would rise from $967 to approximately $991, and a couple’s payment would increase from $1,450 to $1,486.
Supplemental Security Disability Insurance (SSDI): Similarly, SSDI recipients will see an increase in their monthly payments, although the exact amount will depend on their individual circumstances.
How is the COLA Calculated?
The COLA percentage is calculated by comparing the CPI-W data for the third quarter of the current year to the same period from the previous year. This data reflects the changes in the prices of goods and services that households typically purchase, like food, medical costs, and utilities. The percentage increase resulting from this comparison determines how much Social Security benefits will be raised for the following year.
What Factors Affect the COLA?
The final COLA percentage is based on the inflation rate, which affects the cost of living across the U.S. The higher the inflation rate, the higher the COLA increase. For 2026, the estimated increase of 2.5% suggests moderate inflation, similar to the increase applied in 2025. However, keep in mind that the actual increase for each individual will vary based on factors like:
Work History: Years of contributions to Social Security
Income: The amount of benefits a person currently receives
Type of Benefit: Whether the person is receiving retirement, SSI, or SSDI benefits
What Will the Official Increase Be?
Although the Senior Citizens League estimates a 2.5% COLA increase for 2026, the official percentage won’t be determined until October 2025. Once it is announced, the changes will take effect in January 2026. It’s important to remember that these figures are estimates and could vary depending on personal circumstances.
Social Security recipients can expect a modest increase in their benefits for 2026, with an estimated 2.5% COLA adjustment. While this will help many beneficiaries keep pace with rising living costs, the exact amount will depend on individual factors. The SSA will officially announce the increase in October 2025, and the adjustments will go into effect in January 2026.
