WASHINGTON – Starting this month, the Social Security Administration’s annual cost-of-living adjustment will go up by 2.8%, translating to an average increase of more than $56 for retirees every month.
The benefits increase for nearly 71 million Social Security recipients started in January. And increased payments to nearly 7.5 million people receiving Supplemental Security Income started on Dec. 31, 2025.
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The cost-of-living adjustment, or COLA, for retirees and disabled beneficiaries is financed by payroll taxes collected from workers and their employers, up to a certain annual salary, which is slated to increase to $184,500 in 2026, from $176,100 in 2025.
Recipients received a 2.5% cost-of-living boost in 2025 and a 3.2% increase in their benefits in 2024, after a historically large 8.7% benefit increase in 2023, brought on by record 40-year-high inflation.
The smaller increase for 2026 reflects moderating inflation. The agency already notified recipients of their new benefit amount by mail.
Efforts to boost benefits for seniors
In addition, the Social Security Administration faces a looming bankruptcy date if it is not addressed by Congress. The June 2025 Social Security and Medicare trustees’ report states that Social Security’s trust funds, which cover old age and disability recipients, will be unable to pay full benefits beginning in 2034. Then, Social Security would only be able to pay 81% of benefits.
Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67.
While a permanent solution for shoring up the benefits program has not been passed into law, both the Trump and Biden administrations have recently signed into law new benefits for retirees, which are expected to boost their finances.
The Trump administration, as part of Republicans’ tax and spending bill, gave tax relief to many seniors through a temporary tax deduction for seniors aged 65 and over, which applies to all income — not just Social Security. However, those who won’t be able to claim the deduction include the lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold.
Additionally, former President Joe Biden in 2024 repealed two federal policies — the Windfall Elimination Provision and the Government Pension Offset — that previously limited Social Security payouts for roughly 2.8 million people, including largely former public workers.
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