Every year, Social Security adjusts payments to help retirees keep up with inflation. The short explanation is that the Social Security Administration (SSA) looks at consumer price data from the current year and compares it with data from the previous year to determine the annual increase.
This process is known as the cost-of-living adjustment, or COLA. It is an important feature of the Social Security program, and retirees eagerly await news of what the COLA will be each year. And the good news is that the 2026 COLA could be more than was originally expected.
What will the 2026 Social Security COLA be?
According to the latest estimates from the nonpartisan Senior Citizens League, the 2026 COLA could be 2.6%, which is one percentage point higher than the prior estimate of 2.5%. Overall inflation data paints a similar picture, with a 2.6% increase in the CPI-W (the version of the Consumer Price Index used to calculate the COLA) in the latest inflation report.
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To be clear, we won't know for sure what the 2026 COLA will be until mid-October. The SSA uses third-quarter inflation data (July, August, and September) to determine the official COLA, and we won't see September's data until a couple of weeks after the end of that month. So the reality is that nobody knows exactly what the COLA will be.
Having said that, if the 2.6% estimate comes to fruition, it would mean a roughly $52 monthly increase for the average retired worker's benefit of $2,005 per month. In other words, the average monthly benefit can be expected to increase to about $2,057.
Why it might not be as good as it sounds
In practice, however, the Social Security COLA is only one of two things that determines how much more money will arrive in the bank accounts of Social Security recipients.
The other big factor is Medicare Part B premiums, which are typically paid directly from Social Security checks of beneficiaries age 65 and older. And a major problem is that in many years, the Medicare Part B premiums increase at a rate that is significantly higher than the COLA.
This looks as if it might be the case in 2026. The 2025 Medicare Trustees report indicated that premiums are expected to rise from $185 in 2025 to $206.50 per month next year, an increase of $21.50.
Here's why this is important. Sure, the average retired worker's Social Security benefit could rise by about $52, but after the Medicare premium increase, the actual increase would be just over $30. For retirees who receive a relatively low monthly Social Security benefit, it would have an even worse impact. In short, when the COLA rises by 2.6% and Medicare Part B premiums rise by 11.6%, it doesn't exactly give retirees enough additional income to keep up with the rising costs of goods and services.
As mentioned, we don't know exactly what the 2026 COLA will be just yet. And to be fair, there have been some years when the COLA grew faster than Medicare premiums. For example, in 2019, Medicare Part B premiums increased by about 1%, while Social Security beneficiaries got a 2.8% increase.
Even so, the clear trend in recent years has been Medicare premiums rising significantly faster than Social Security benefits. In fact, over the past five years, the cumulative Social Security COLA has been about 23.3%. Meanwhile, Medicare Part B premiums have increased by 28%.
