WASHINGTON (AP) — Social Security’s cost-of-living increase will rise 2.8% in 2026, translating into an average increase of more than $56 for retirees each month, agency officials said Friday.
The benefit increase for nearly 71 million Social Security beneficiaries will take effect starting in January. And increased payments to nearly 7.5 million people who receive Supplemental Security Income will begin Dec. 31.
Friday’s announcement was supposed to be made last week but was delayed due to the federal government shutdown.
The cost of living adjustment, or COLA, for retirees and disabled beneficiaries is funded by payroll taxes collected from workers and their employers, up to a certain annual salary, which is scheduled to increase to $184,500 in 2026, from $176,100 in 2025.
Recipients received a 2.5% increase in the cost of living in 2025 and a 3.2% increase in their benefits in 2024, after a historically large 8.7% increase in benefits in 2023, caused by a 40-year high inflation.
The smaller increase for 2026 reflects moderate inflation.
Social Security Administration Commissioner Frank Bisignano said in a statement Friday that the annual cost-of-living adjustment “is one way we are working to ensure benefits reflect current economic realities and continue to provide a foundation of security.”
Emerson Sprick, director of labor and retirement policy at the Bipartisan Policy Center, said in a statement that cost-of-living increases “cannot resolve all of the financial challenges households face or all of the program’s shortcomings.”
COLA’s latest announcement comes as the Social Security Administration has been undergoing nearly a year of turmoil, including laying off thousands of workers as part of the Trump administration’s efforts to reduce the size of the federal workforce. Trump administration officials also made statements they later retracted that raised concerns about the future of the program.
Treasury Secretary Scott Bessent said in July that the Republican administration was committed to protecting Social Security hours after saying in an interview that a new child savings program that President Donald Trump signed into law “is a backdoor to privatizing Social Security.”
And in September, Bisignano had to walk back comments that the agency is considering raising the retirement age to shore up Social Security. “The Administration is not considering raising the retirement age at this time,” Bisignano said at the time in a statement emailed to The Associated Press.
“I think everything is being considered, will be considered,” Bisignano said in the statement when asked if raising the retirement age was a possibility to maintain the solvency of the old-age program.
Additionally, the Social Security Administration faces a looming bankruptcy date if Congress does not address it. The Social Security and Medicare trustees’ June 2025 report states that Social Security trust funds, which cover old-age and disability beneficiaries, will not be able to pay full benefits starting in 2034. Then, Social Security would only be able to pay 81% of benefits.
Social Security benefits were last reformed about 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67.
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