Few if any annual announcements are more anticipated by Social Security’s more than 70 million traditional beneficiaries than the cost-of-living adjustment (COLA).

Social Security’s COLA helps beneficiaries fight back against inflation. If benefits weren’t adjusted on a near-annual basis to account for the rising price of goods and services, the buying power of Social Security income would decline over time.

Normally, beneficiaries would have known exactly how much their monthly checks would climb in the new year over a week ago. But this hasn’t been a normal year. The ongoing federal government shutdown has delayed the reporting of key economic data, which includes the September inflation report. A figure from this report is the final puzzle piece needed to calculate Social Security’s 2026 COLA.

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This morning (Oct. 24), at 08:30 a.m. ET, the U.S. Bureau of Labor Statistics released the September inflation report nine days later than initially scheduled and paved the way for the Social Security Administration (SSA) to announce “raises” for the upcoming year, which the administration did shortly after.

Aided by a modest “Trump bump,” Social Security payouts will officially increase by 2.8% in 2026.

Social Security’s modest payout increase for 2026 is historic

On paper, a 2.8% raise might not be much to crow about. But when examined next to the COLAs beneficiaries have received in recent years, it’s historic.

Following the largest-ever year-over-year increase in U.S. M2 money supply during the COVID-19 pandemic, the prevailing rate of inflation in the U.S. soared to a peak of 9.1% in 2022. With COLAs designed to help beneficiaries keep pace with rising prices, respective raises of 5.9%, 8.7%, 3.2%, and 2.5% were passed along from 2022 through 2025, respectively. The 8.7% boost in 2023 was the largest on a percentage basis in 41 years.

While the 2.8% payout increase for 2026 isn’t going to rival 2022, 2023, or 2024 on a percentage basis, it does mark the fifth consecutive year where recipients are getting at least a 2.5% COLA increase. The last time this happened was 1988 through 1997, when COLAs clocked in between 2.6% and 5.4%.

Next year’s benefit increase is also modestly higher than the 2.3% average COLA since 2010.

Here’s how much monthly Social Security benefit checks will rise in 2026

But it’s one thing to be given a percentage by the SSA and something entirely different to understand how much that percentage will increase your Social Security payout in dollar terms.

Based on the most recent monthly statistical snapshot from the SSA, covering payouts in August 2025 (the timely release of Social Security data has been adversely impacted by the government shutdown, as well), more than 76% of all beneficiaries were retired workers.

On average, the roughly 53.3 million retirees receiving a monthly payout took home $2,008.31 in August. Following this morning’s COLA announcement, the average retired-worker beneficiary will see their monthly income from the program climb by $56.23 in 2026 to almost $2,065.

Meanwhile, nearly 7.1 million workers with long-term disabilities received an average Social Security check of $1,582.95 in August. Next year’s COLA will lift this typical benefit by $44.32 per month.

Lastly, the average survivor beneficiary brought home $1,575.30 in August. The newly announced raise for the new year will increase this average monthly payout by $44.11.

Social Security COLAs have a habit of coming up short

Unfortunately, the program’s historic 2026 payout doesn’t necessarily translate into good news for all beneficiaries. While everyone enjoys seeing their monthly benefit grow from one year to the next, it’s not as enjoyable if the raise you receive fails to account for the inflationary pressures you’re contending with.

More often than not, Social Security’s COLA ultimately comes up short for the aged beneficiaries that the program is designed to protect.

For instance, 87% of Social Security’s traditional beneficiaries (retired workers, workers with disabilities, and survivor beneficiaries) were age 62 and above in December 2024. However, the inflationary index being used to track price changes and calculate annual COLAs for the program is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

As its name implies, the CPI-W is all about “urban wage earners and clerical workers,” who are typically under the age of 62, not currently receiving a Social Security payout, and spend their money differently than retirees.

Compared to those under the age of 62, retirees spend a higher percentage of their monthly budget on shelter and medical care services. The trailing-12-month inflation rate for both of these expenses is currently higher than the COLA being passed along in 2026. In other words, it suggests retirees will see the purchasing power of their Social Security income decline.

Next year might also be dicey for dual enrollees — current Social Security beneficiaries who are enrolled in traditional Medicare.

According to a mid-June estimate found in the 2025 Medicare Trustees Report, the Part B premium is forecast to climb by 11.5%, from $185/month to $206.20/month, in 2026. A double-digit percentage hike in the premium for the segment that covers outpatient services will offset some or all of next year’s COLA for dual enrollees.

Long story short, today’s historic COLA announcement should be taken with a grain of salt by most retirees.