2026 Social Security COLA Shocker: Benefits Up 2.8% (+$56), But Rising Costs Threaten the Gain

COLA Increase: SSA announced a 2.8% cost-of-living adjustment (COLA) for 2026 – higher than last year’s 2.5%. About 75 million Americans on Social Security (retirees, survivors and disabled) will see checks rise by roughly $56 per month on average starting in January 2026 ^[1] ^[2]. Supplemental Security Income (SSI) recipients (~7.5 million people) get a 2.8% bump from Dec. 31, 2025 ^[3].
Medicare Premiums: Meanwhile, experts project the standard Medicare Part B premium will jump to roughly $206 in 2026 (up about $21 from $185 in 2025) ^[4] ^[5]. If that holds, nearly half of the new COLA increase will vanish into higher premiums ^[6]. (Open Enrollment for 2026 plans runs Oct. 15–Dec. 7.)
VA & Federal Pensions: Veterans and federal employees get similar bumps. VA disability checks rise ~2.8% as well – e.g. about +$4.91 for a 10% disabled vet and +$107.28 for a 100% disabled vet with no dependents ^[7]. Civil Service annuities also go up ~2.8%, but some federal retirees (FERS system) receive only a 2% “diet” COLA by formula ^[8].
Social Security Website: The SSA is urging people to sign up at MySocialSecurity.gov. Online account holders can view their personalized COLA notice up to 3 weeks earlier than mailed letters by opting for digital alerts ^[9]. The new Part B premium for 2026 will appear in the Message Center of My Social Security in late November ^[10].
Experts’ Take: Seniors’ advocates caution that the new COLA will be eaten up by health and housing inflation. AARP notes Social Security is the main income source for 40% of older Americans ^[11], while the Senior Citizens League warns the CPI-W formula underweights seniors’ costs, meaning real purchasing power has dropped ~20% since 2010 ^[12] ^[13]. Kevin Thompson (9i Capital) bluntly says after the Medicare premium bump “there’s not much left over” from the 2.8% raise ^[14].

With markets near record highs (S&P 500 and Nasdaq hitting all-time peaks) and the 10‑year Treasury around 4.0% ^[15], retirees face a mixed picture: a modest benefit hike but also sharply rising expenses. Read on for the full breakdown.

Official Announcement: 2.8% COLA for 2026

On Oct. 24, 2025 the Social Security Administration (SSA) announced a 2.8% COLA for benefits payable in 2026 ^[16]. This adjustment will apply to Old-Age, Survivors, and Disability Insurance (OASDI) and to SSI. In practical terms, nearly 71 million Social Security beneficiaries will see their monthly checks go up by 2.8% in January 2026 ^[17]. The average retired worker’s benefit – around $2,000/month now – will rise by about $56 per month ^[18] ^[19]. (An extra ~$650 per year.) SSI payments to roughly 7.5 million low-income Americans increase by the same percentage, effective Dec. 31, 2025 ^[20].

This year’s COLA is slightly higher than the 2.5% boost given in 2025. It was delayed by the recent federal government shutdown, which postponed the BLS inflation report. SSA Commissioner Frank J. Bisignano reiterated that “Social Security is a promise kept,” noting the COLA keeps benefits in line with the economy ^[21]. The agency will begin mailing a new one-page COLA notice in December detailing each person’s new benefit ^[22].

SSA emphasizes digital access: beneficiaries with a my Social Security account can opt for email/text alerts and see their personal COLA notice online up to three weeks earlier than by mail ^[23]. (Those who don’t enroll will simply get a mailed letter in December.) The agency also noted that Medicare’s 2026 premium rate will be announced via the same messaging system late November ^[24].

How It Breaks Down by Group

The 2.8% COLA hike affects most federal benefit programs:

Social Security (Retirees, Survivors, Disabled): Almost all ~71 million recipients get the full 2.8% increase starting Jan 2026 ^[25]. The average retiree gets about +$56/month (SSA’s calculation) ^[26] ^[27]. (Some higher-earners or spouses might owe extra taxes or premiums, see below.)
Supplemental Security Income (SSI): SSI is a needs-based benefit for elderly and disabled with little income. SSI checks for ~7.5 million Americans rise 2.8%, with higher payments hitting accounts at the very end of 2025 ^[28].
Federal Civil Service (FERS/CSRS): Federal employees under the Civil Service Retirement System (CSRS) get the full COLA in their annuities. But FERS retirees typically get a “diet COLA” if it’s above 2%. Under the FERS formula, any COLA above 3% is cut by 1 point, and any between 2–3% is reduced to 2%. Thus, FERS annuitants will get only 2.0% in 2026 ^[29], not the full 2.8%.
Veterans’ Benefits: By law, VA disability and related payments match the SSA COLA. Disabled veterans rated 10%–100% will see their compensation boost ~2.8% as well ^[30]. For example, a vet with a 10% disability rating will get about +$4.91 per month extra, and a 100% disabled vet about +$107.28 (single, no dependents) ^[31]. Dependency & Indemnity Compensation (DIC) for survivors also rises 2.8%.
Military and Other Pensions: Military retirement pay goes up 2.8% (e.g. +$28 per $1,000 of pension) as does retired pay for VA beneficiaries ^[32]. Other federal pensions (e.g. GS/NG) generally match the SSA COLA unless capped as above.

In sum, tens of millions of retirees, veterans, disabled Americans and survivors all see a modest boost in 2026 ^[33] ^[34]. Even many retirees who had small benefits (SSI recipients) gain slightly. “The COLA is vital to our mission,” Bisignano said ^[35]. AARP CEO Myechia Minter-Jordan noted that Social Security is “a lifeline of independence and dignity, for tens of millions of older Americans.” ^[36]. (AARP points out SS is the primary income for ~40% of older households ^[37].)

Medicare Part B Premiums and Out-of-Pocket Costs

However, experts warn much of the new COLA will be eaten by rising costs. The biggest bite is Medicare Part B. Based on actuarial estimates, the 2026 Part B premium is likely to jump to around $206 per month ^[38], up about $21 from $185.50 in 2025. If that happens, roughly half of the average $54/month COLA increase disappears in higher premium deductions ^[39]. (Note: higher-income beneficiaries may owe even more in Part B IRMAA surcharges.)

SSA will calculate the final Part B premium in November; once set, beneficiaries will see the amount in their My Social Security message center ^[40]. But for planning purposes, retirees should assume ~+$206. In addition, the Part B deductible is expected to rise by about 12% (to roughly $288 in 2026) ^[41].

Aside from Medicare, everyday expenses are rising faster than general inflation. Food, housing, utilities and prescription drug prices have been climbing above 3%–4% annually, according to government data ^[42] ^[43]. Even with a 2.8% COLA, many seniors say they feel poorer because staples like groceries and medical care surge by more than that. A recent Newsweek commentary noted: “Even with [the COLA] bump, it still won’t be enough to cover the rising costs seniors face… essentials like housing, healthcare, and groceries continue to climb faster than the COLA can keep up with.” ^[44].

Financial planner Kevin Thompson (9i Capital) sums it up: “A $30,000 annual Social Security benefit only increases by about $67.50 per month. When you factor in the $21.50 increase in the Medicare Part B premium, there’s not much left over.” ^[45]. In other words, a retiree getting ~$2,000/mo today would see about +$54, but then lose ~$21 of it immediately to Part B. The net gain is often only a few dollars a week after health costs – making budgets tight if food or housing costs still rise.

Many advocates have pointed out that the COLA formula (based on the Consumer Price Index for Urban Wage Earners, CPI-W) understates retirees’ real costs. The Senior Citizens League (TSCL) notes that retirees have effectively lost nearly 20% of buying power since 2010 due to CPI-W’s weightings ^[46]. TSCL argues Congress should adopt a CPI-E index weighted for seniors (as some bills propose) to better protect benefits ^[47] ^[48]. For now, the formula stands, so seniors must stretch that extra few dollars: many financial advisors recommend checking Medicare coverage options during Open Enrollment and shopping for lower premiums or extra help programs.

Veterans and Military Raises

Veterans and military personnel also benefit from the COLA. As noted, VA disability compensation increases by 2.8% starting Dec. 1, 2025 ^[49]. The VA will issue updated disability rate charts online (as of Dec. 1) reflecting the new amounts ^[50]. (For example, a vet rated 70% disability with a spouse would see $1,961.62 monthly in 2026 vs. $1,909.03 in 2025 ^[51].) Survivors’ Dependency & Indemnity Compensation (DIC) also rises 2.8% ^[52].

Military retirees receive the 2.8% raise as well. A retiree with $1,000 monthly pension will see +$28 (unless on the reduced Redux plan, +$18) ^[53]. (Note: military who retired in 2025 get a slightly prorated 2026 increase.) The military news site Military.com explains these lifts and publishes updated charts for all disability levels ^[54].

In short, the COLA bump is universal across federal benefit programs. As one analyst put it, “Military retirees and VA beneficiaries aren’t the only ones who benefit…Civil Service retirees and Social Security recipients will also receive the 2.8% bump” ^[55]. The VA pay charts for 2026 (online as of December) will reflect the new rates for all disability levels and dependents.

Reactions from Advocates and Experts

Experts and advocacy groups have voiced mixed reactions. Many senior advocates say the COLA is welcome but insufficient. Senior Citizens League Executive Director Shannon Benton warned “the 2026 COLA is going to hurt for seniors” and called for a stronger formula ^[56]. TSCL’s press releases and Newsweek commentary stress that everyday inflation far outpaces 2.8% for most seniors ^[57] ^[58]. They and others urge Congress to consider CPI-E or other measures.

AARP focused on Social Security’s importance: CEO Minter-Jordan noted that tens of millions of older Americans rely on SS as a “lifeline of independence and dignity” ^[59]. She highlighted that SS is already the primary income for about 40% of seniors ^[60]. In a statement, AARP praised efforts to protect the COLA but echoed concerns about affordability of healthcare and housing.

Tax and budget experts add that higher benefits can also affect taxes. Some retirees may see more of their Social Security income become taxable or push into higher tax brackets as benefits rise. New tax rules in 2026 may offset this for some, but many will still pay more.

On Capitol Hill, policymakers note that Social Security’s trust fund remains on track for mid-2030s insolvency absent changes. The COLA itself is an automatic adjustment, but the underlying finances (payroll tax base, spending) continue to be debated. Notably, a recent Social Security Fairness Act signed in 2025 repealed certain pension offsets (WEP/GPO), giving some beneficiaries a one-time increase in 2025 payments ^[61]. This year’s COLA adds on top of that in 2026.

Economic Context and Outlook

The COLA comes against a backdrop of relatively strong markets and still-elevated inflation. As of late Oct. 2025, U.S. stock indexes remain near record levels. The S&P 500 was around 6,700 and the Nasdaq 100 about 25,000, as investors await new inflation data ^[62]. The 10-year Treasury yield is about 4.0%, down slightly from summer peaks ^[63]. In recent Fed minutes, officials leaned toward rate cuts if the economy weakens, which could ease inflation down the road.

Analysts at Kiplinger and elsewhere had forecast the COLA around 2.6–2.8% based on summer CPI data ^[64]. A surprise jump in September inflation could have pushed the COLA to 2.8–3.0%, but it came in slightly cooler than feared. Now that the 2.8% COLA is locked in, forecasters will watch December–February CPI and Fed moves to gauge next year’s COLA (for 2027). If inflation stays around 3%, another mid-single-digit COLA is likely next year.

For consumers, the immediate concern is balancing higher benefit checks against pricier essentials. Seniors should review Medicare plans in the current open enrollment (Oct. 15–Dec. 7) to lock in the best Part B/D coverage for 2026. They should also update budgets now that the official COLA is known: accounts will see the new benefit by January, and smaller SSI checks by year’s end. Beneficiaries with online My Social Security accounts can log in after late November to see exactly how much their own check will grow ^[65].

Bottom line: Social Security benefits will be a bit higher in 2026, but many households will feel only a slim increase after paying the new Medicare premium and other costs. As one Washington insider quipped, the COLA is a gift — but with “strings attached” in the form of rising medical and housing bills. In such a tight financial picture, every extra dollar counts – so experts urge seniors to plan carefully and take advantage of all benefit options available ^[66] ^[67].

Sources: Official SSA announcements and fact sheets ^[68] ^[69]; news coverage by CBS MoneyWatch and Fox Business ^[70] ^[71]; advocacy reports (Senior Citizens League, NARFE) ^[72] ^[73]; AARP analysis ^[74]; Military.com and VA releases ^[75]; plus financial commentary from Kiplinger and Newsweek ^[76] ^[77]. (All figures are for 2026 benefits.)

FINALLY! Increases to Social Security Announcement - COLA 2026 Update

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