Millions of Social Security beneficiaries are anticipating the 2026 cost-of-living adjustment (COLA), with current projections suggesting an increase between 2.7% and 2.8%. This adjustment, which would boost monthly payments, is scheduled to be announced in October, but its timing could be affected by a potential federal government shutdown.
Key Takeaways
- Projected Increase: Experts forecast the 2026 Social Security COLA to be in the range of 2.7% to 2.8%, based on recent inflation data.
- Potential Dollar Amount: An increase of this size would add approximately $54 to the average monthly retirement benefit.
- Announcement Timeline: The official COLA is typically announced in October, but a government shutdown could delay the release of necessary inflation data.
- Medicare Premiums: The final take-home increase for beneficiaries will also depend on the 2026 Medicare Part B premium, which is expected to rise and is deducted from Social Security checks.
Modest Increase Expected for 2026 Benefits
Social Security recipients are likely to see a modest increase in their monthly benefits next year. As inflation has moderated from its recent peaks, the corresponding cost-of-living adjustments have also become smaller. For 2026, analysts are forecasting a COLA that closely aligns with long-term averages.
According to The Senior Citizens League, a nonpartisan advocacy group, the adjustment is projected to be 2.7%. This would result in an increase of about $54 per month for an individual receiving the average retirement benefit.
Mary Johnson, an independent Social Security and Medicare policy analyst, has provided a slightly higher estimate of 2.8%. Her analysis suggests this would raise the average monthly benefit by approximately $54.70. Johnson noted the projections are extremely close, stating, "I can’t remember it ever being this close."
COLA Projections at a Glance
- The Senior Citizens League: 2.7% increase
- Mary Johnson (Independent Analyst): 2.8% increase
- Average Monthly Increase: ~$54.00 - $54.70
Even a small difference in the percentage can be significant for retirees. Shannon Benton, executive director at The Senior Citizens League, explained the long-term effect. "When you’re accruing over years and years of retirement, a 10th of a percent can make a difference," she said.
How the Annual COLA Is Determined
The Social Security Administration calculates the annual COLA based on inflation data from the third quarter of the year. Specifically, it uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The final piece of data needed for the calculation is the September inflation report from the Bureau of Labor Statistics (BLS). This report is scheduled for release on October 15. Once this data is available, the Social Security Administration can finalize and announce the official COLA for the upcoming year.
Recent Historical COLA Figures
The projected 2.7%-2.8% for 2026 is a return to more typical levels after years of volatility. It is slightly higher than the 2.5% adjustment for 2025 but significantly lower than the 8.7% COLA in 2023, which was the largest in four decades. The average COLA over the past 20 years is 2.6%.
Despite the formal inflation metrics showing a slowdown, many older Americans continue to struggle with high costs for essential goods and services. "They’re feeling the pinch, but the inflation numbers aren’t necessarily showing it," Benton noted, highlighting the financial pressures that persist for many beneficiaries.
Government Shutdown Could Delay Announcement
A significant variable this year is the possibility of a federal government shutdown. If lawmakers in Washington are unable to agree on funding, it could delay the release of key economic data, including the September CPI report from the BLS.
According to the Department of Labor’s contingency plan, a delay in the CPI data would directly impact the timing of the Social Security COLA announcement. This situation has occurred before. In 2013, a government shutdown postponed the CPI release, which in turn delayed the COLA announcement until October 30.
A similar delay could occur with the announcement of the 2026 Medicare Part B premium, which is also dependent on federal government operations.
Medicare Premiums Will Impact Net Benefit Increase
For most beneficiaries, the actual increase in their bank accounts will be less than the official COLA percentage suggests. This is because Medicare Part B premiums are typically deducted directly from Social Security payments.
"You don’t know the bottom line until they announce the Part B premium," Johnson explained, emphasizing that the net benefit is what truly matters to retirees.
Medicare trustees have estimated that the standard monthly Part B premium could rise by 11.6% in 2026. This would be an increase of $21.50 per month, raising the standard premium from $185 to $206.50. If this projection holds, it would consume a substantial portion of the COLA increase for many individuals.
The 'Hold Harmless' Protection
A crucial protection known as the "hold harmless" provision prevents a person's Social Security benefit from decreasing due to a rise in Medicare premiums. This rule applies to the majority of beneficiaries who have their Part B premiums deducted from their Social Security checks.
This means that even if the dollar amount of the Part B premium increase is larger than the COLA increase, a beneficiary's check will not be smaller than it was the previous year. However, in such a scenario, the beneficiary would effectively see no cost-of-living increase. This provision does not apply to high-income beneficiaries who pay IRMAAs (Income-Related Monthly Adjustment Amounts) or to new enrollees.
