Blog

COLA Adjustments May be Higher than Expected in 2026

As of August 2025, the Social Security Administration states that 52.6 million retires receive a Social Security payment every month. For a large percentage of them this is their lifeline, and those funds are used to clothe and house them. So, keeping the payments adjusted for inflation and the cost of living is an important task for the SSA.

Recently, it was announced that the Cost-of-Living Adjustment (COLA) may be just a tad bit higher next year than previously estimated. As new data comes in it has become apparent to SSA officials that the original 2.7% adjustment is a little low. They announced that COLA will probably be 2.8% for 2026. This doesn’t seem like much but according to Mary Johnson, an independent Social Security and Medicare policy analyst, that averages out to $54.70 per month, per recipient. That’s basically $600 per year and not insignificant by any means.

Retirees who depend on the Social Security payments are constantly worried about inflation and rightly so. As most economists say, inflation is “the hidden tax”. If your money ever-so-slowly becomes worth less month-by-month, you will feel the effects in your buying power. Simply put, you will be able to afford less and less as the value of money decreases. This is why COLA is so important.

The average monthly payment for retirees and their families is currently $1955. In today’s economy that would barely cover rent payment plus one basket of groceries for most people. Around 25% of retirees essentially live check-to-check on their Social Security payments. Two-thirds of retirees depend on the money to make ends meet.