👵 Social Security: The 2.8% COLA Adjustment for 2026: What Social Security Recipients Need to Know

I. The Official 2.8% COLA Increase

The Social Security Administration (SSA) announced that the Cost-of-Living Adjustment (COLA) for 2026 will be 2.8%. This adjustment is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2024 to the third quarter of 2025.

Key Dates for Recipients

• Social Security (Retirement, SSDI, Survivors): The 2.8% COLA will begin with benefits payable in January 2026. Recipients will receive their first boosted payment starting that month.
• Supplemental Security Income (SSI): Increased payments for SSI recipients will begin slightly earlier, on December 31, 2025.

Average Benefit Impact

The 2.8% COLA translates to a gross increase in the monthly check amount. For the average retired worker, the benefit is expected to increase by approximately $56 per month (raising the average monthly check from around $2,015 to roughly $2,071).

II. The Offsetting Factor: Medicare Part B Premiums

While the COLA represents a gross increase, the net benefit received by many Social Security beneficiaries will be reduced due to the announced increase in Medicare Part B premiums.

• 2026 Medicare Part B Standard Premium: The standard monthly premium for Medicare Part B is set to increase to $202.90 per month in 2026, an increase of $17.90 from the 2025 rate.
• Net COLA Effect: Since Medicare Part B premiums are automatically deducted from Social Security checks for most beneficiaries, this premium hike will offset a significant portion of the COLA gain. For the average recipient, the net monthly increase after the Medicare Part B deduction will be reduced from roughly $56 to around $38.
• Hold Harmless Provision: Individuals whose premium increase is greater than their COLA increase for 2026 will not see their Social Security benefit drop below the prior year's level, thanks to the "hold harmless" provision.

III. Other Important 2026 Changes for Workers

The COLA announcement also includes adjustments to other limits important for current workers and those collecting benefits while working:

• Maximum Taxable Earnings: The maximum amount of earnings subject to the Social Security tax (the taxable maximum) will increase to $184,500 (up from $176,100 in 2025). This affects high-income earners.
• Earnings Limit for Early Claimers: For workers who are younger than full retirement age, the amount they can earn before benefits are reduced increases to $24,480.

Frequently Asked Questions (FAQ’s)

1. When will I receive my official COLA notice?

The Social Security Administration (SSA) begins mailing COLA notices to beneficiaries in early December 2025. If you have a personal my Social Security account online and opted for electronic notices, you may be able to view your updated benefit amount earlier, typically in late November or early December.

2. Do I need to apply to receive the COLA increase?

No. The COLA is automatic. The SSA automatically adjusts the benefit amount for all eligible Social Security and SSI beneficiaries.

3. How does the increase in the Medicare Part B premium affect my Social Security check?

If your Medicare Part B premium is deducted directly from your Social Security payment, the increase in the premium (+$17.90 for the standard rate) will reduce the net amount of the 2.8% COLA that you actually see deposited into your bank account.

4. Why is the increase based on the CPI-W and not a senior-specific index?

By law, the COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some consumer advocacy groups argue that a different index, such as the CPI-E (Experimental Consumer Price Index for the Elderly), would be more representative of the rising costs faced by seniors, particularly high healthcare costs.