Social Security's 2026 COLA Is Set at 2.8%. Here's How Much More You'll Get

If you collect Social Security, your check is about to get a little bigger. The Social Security Administration just announced a 2.8% cost-of-living adjustment (COLA) for 2026.

It's not a record-setter, but it's more than many retirees expected after a year of cooling inflation and mixed economic signals.

What that 2.8% raise means in real dollars

The average monthly Social Security benefit is currently about $1,915. A 2.8% increase adds roughly $54 more per month, or $648 over the course of 2026.

Higher earners will see a larger bump, but not dramatically. The maximum benefit for someone retiring at full retirement age -- currently around $3,900 per month -- will climb by about $109.

The adjustment takes effect for January 2026 payments. For those receiving Supplemental Security Income (SSI), the increase hits slightly earlier, with the Dec. 31, 2025 payment.

Why the COLA went up (and why it's smaller than it feels)

The COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Translation: When inflation rises, so do Social Security checks.

This year's 2.8% figure reflects moderate inflation, especially across categories like food, housing, and healthcare. But even a 2.8% raise often doesn't match the real cost increases most retirees experience.

Healthcare premiums and prescription costs, for example, are rising faster than general inflation. Housing expenses, too, remain stubbornly high. That's why 77% of retirees say the COLA isn't enough to keep pace with their real spending, according to an Investopedia survey published after the announcement.

The gap between headline inflation and retiree inflation keeps growing, and each year that gap compounds.

Other key Social Security changes for 2026

A few other annual adjustments are worth knowing about:

• Earnings cap: The maximum amount of income subject to Social Security payroll tax will rise from $176,100 to about $184,500.
• Maximum taxable earnings: Workers paying into the system will contribute up to $11,439 next year, up from $10,917.
• Earnings limit for early retirees: If you claim benefits before full retirement age, you can earn up to $23,400 in 2026 (up from $22,320) before the SSA temporarily withholds part of your benefit.

How to see your new benefit amount

If you have a "my Social Security account", you'll see your updated benefit reflected in December. The SSA will also mail benefit notices by the end of that month.

It's a good time to double-check your account, make sure your contact info is current, and review how Medicare premiums might offset some of the new income.

For many retirees, the COLA raise can be largely absorbed by Medicare Part B premium increases, which are expected to rise again in 2026. The official Medicare numbers will be released later this fall.

How to make the most of your COLA bump

Even small annual increases can have a real impact if you're strategic. A few smart moves to consider:

• Redirect the raise to savings. Set up an automatic transfer into a high-yield savings account to earn up to 10 times more interest than a big-bank account. See some of the best high-yield savings account options here.
• Reassess your budget. Treat the increase as a moment to reset spending priorities, especially if you've seen utility or grocery costs rise faster than your income.
• Review your tax exposure. Higher benefits can push more of your Social Security income into taxable territory. A quick check-in with a tax pro can help you plan smarter withdrawals from IRAs or 401(k)s.

If you're still saving for retirement, the COLA announcement is also a reminder of the power of inflation-protected income. It's one of Social Security's most underappreciated benefits, and a good model for how to structure your own portfolio for the long run.