Every October, over 70 million Americans eagerly wait for the Social Security Administration (SSA) to announce the Cost-of-Living Adjustment (COLA). This annual bump is designed to help your benefits keep pace with inflation, but will this actually help you cover your expenses, and what does this adjustment really mean for your wallet?

Let’s take a look at these questions and some others you might have as we break down the 2026 Social Security COLA.

How is the Social Security Cost-of-Living Adjustment decided?

The annual COLA is not set by Congress or arbitrarily chosen. It is determined by a specific formula defined in the Social Security Act. The adjustment is based on the year-over-year increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This measurement tracks the typical spending of working-age households. Specifically, the Social Security Administration looks at the percentage change in the CPI-W during the third quarter of the current year (July, August, and September) compared to the same period in the previous year. For 2026, this calculation resulted in a 2.8% increase.

What does this mean for my benefits?

For the average retiree receiving benefits, this 2.8% adjustment translates to an increase of about $56 per month. Keep in mind that Social Security benefit levels are calculated based on personal financial factors and the time at which you claim, and can vary greatly from the average. Still, while the increase is welcome (especially as it follows the modest 2.5% COLA from 2025), it is slightly below the decade-long average increase of roughly 3.1%.

Will the COLA help me cover my expenses?

While any increase helps, the general consensus is that this COLA may not be enough to fully offset rising costs for many retirees. According to a recent survey by the AARP, a majority of Americans age 50 and over believe an adjustment of around 3% is insufficient to keep up with their expenses. One potential reason for this disappointment is that the CPI-W formula does not accurately reflect the cost of living for seniors, as it measures working households and doesn’t consider critical senior expenses, such as medical care, shelter, and utilities, which have often climbed faster than the CPI-W. In fact, a significant portion of the average COLA boost will immediately be absorbed by rising Medicare Part B premiums, which are projected to increase 11.6 % to around $206 per month in 2026.

How can I see my new adjusted benefit amount?

You have probably already received your official COLA notice, as they began mailing in early December. However, the quickest and most secure way to view your new benefit amount is online. If you have a personal “my Social Security” account, you can check the message center to see your COLA notice and updated benefit details at any time. If you don’t have an account, now is the perfect time to create one at SSA.gov/myaccount.

What’s next?

If you’re receiving Social Security, good news—you’ll get a 2.8 % increase this year, which is better than the 2.5 % in 2025. But real-world costs are rising in areas retirees feel most (health, housing, food), so while the COLA helps maintain purchasing power, it may not fully restore it. Schedule a call with us today to see how this year’s COLA impacts your long-term strategy and what steps you can take to stay ahead and help your retirement income keep up with rising costs.