Social Security Benefits to Increase by 2.8% in 2026 Amid Rising Costs for Seniors
(CNN) — Social Security recipients will receive a 2.8% boost in their monthly benefits in 2026, the Social Security Administration announced Friday. However, many seniors say the annual adjustments haven’t been enough to cover their ever-rising expenses.
The increase for 2026 is larger than the 2.5% cost-of-living adjustment (COLA) that beneficiaries received for this year, but far smaller than those in the few prior years when inflation was running rampant. Monthly payments for retired workers will rise by about $56 to an estimated average of $2,071 starting in January, the agency said.
Nearly 71 million senior citizens, people with disabilities, and others receive Social Security benefits. In total, 75 million Americans receive either Social Security or Supplemental Security Income (SSI) benefits from the agency, with some receiving both.
How the COLA Is Determined
The annual adjustment, known as a COLA, is based on an inflation metric from the third quarter of the year. Inflation has moderated after reaching around a four-decade high in 2022, which resulted in an 8.7% adjustment for 2023.
A related inflation measure, the Consumer Price Index, rose 3% in September compared with a year ago, according to the Bureau of Labor Statistics, which announced the figure Friday.
The announcement of the 2026 COLA was delayed due to the recent federal government shutdown.
Medicare Premiums Could Offset Benefit Increases
A significant portion of the COLA increase for 2026 will likely be offset by a rise in Medicare Part B premiums, expected to be announced next month. The monthly premium for 2026 is forecast to jump to more than $206, up from $185 this year, according to Medicare’s most recent trustees report. This would be about twice the increase seen for 2025.
Nancy Altman, president of Social Security Works, an advocacy group, said in a statement that for the average beneficiary, the higher Medicare premium would consume nearly half of the Social Security benefit increase. For some, the premium hike could eliminate their entire COLA increase.
COLA Often Fails to Keep Up With Seniors’ Expenses
Social Security recipients have long complained that the annual COLA does not keep pace with their actual expenses. According to an analysis last year from The Senior Citizens League, benefits lost 20% of their buying power between 2010 and 2024.
Those who retired in 2010 would need an average boost of $370 a month, or $4,443 a year, to regain the lost value.
Over the last decade, the annual increase has averaged about 3.1%, according to Social Security. Because the COLA is based on the prior year’s inflation rate, it may not accurately reflect current price changes experienced by beneficiaries.
Advocacy groups like AARP have pushed for the COLA formula to better represent seniors’ costs, especially since older adults typically have higher health care expenses.
“The CPI for working Americans doesn’t quite capture what the spending patterns are for older Americans,” Joel Eskovitz, senior director of Social Security at AARP’s Public Policy Institute, told CNN. “It’s close, but there are just different things that working Americans spend on than retired Americans.”
Seniors Struggle and Adjust Spending
Many retirees depend heavily on Social Security; it is the primary source of income for 40% of older Americans, according to AARP.
Sam Ciraulo, a retired adjunct professor in Sacramento, California, lives on roughly $1,400 in monthly Social Security benefits and food stamps. He said that while he appreciates the COLA increase, estimated at about $40, roughly half of that will go towards the anticipated Medicare Part B premium hike.
Ciraulo, 68, has had to turn to nonprofits and religious groups for help paying utilities due to a rare neurological disease that requires him to keep his house cool. However, he’s found securing aid more difficult recently as many organizations are tapped out, overwhelmed with requests, or have closed.
“When I see the electricity bill, when I go to pay it every month, I have to think about what I’m going to cut in order to be able to pay that bill or where I’m going to go to get help to pay that bill from nonprofits,” he said.
Joyce Clarke, a 79-year-old retired executive assistant from Riverside, California, said the annual COLA adjustments “don’t even come close” to covering her rising gas, rent, groceries, and electricity costs.
Last year’s COLA was consumed by a rent increase at her senior housing complex. Clarke called the 2.8% boost “an insult.” This year, she stopped buying fresh beets after their price rose from 89 cents to $1.19 at her local supermarket and now purchases canned beets instead. She also hasn’t been able to afford dining at her favorite Italian restaurant since Christmas.
“It’s a luxury I can’t afford,” Clarke said.
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