Many retirees have felt the impact of the rising costs of goods and services on their budgets in recent years. The annual Social Security cost-of-living adjustment (COLA) is designed to help seniors keep up with inflation. But many people are still struggling with rising prices for everything from groceries to medical bills.
The 2026 COLA will go into effect starting with payments in January. Here's how much retirees of all ages currently receive and how much more the COLA will give them to spend each month.
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Social Security benefits will increase 2.8% in 2026
Since 1975, the annual cost-of-living adjustment has been automatically calculated based on a subset of the Consumer Price Index known as the CPI-W. The CPI-W tracks the prices of over 200 goods and services weighted based on the spending habits of households where the majority of their income comes from working hourly wage jobs.
To calculate the COLA, the Social Security Administration takes the average year-over-year increase in the CPI-W during the third quarter of the year. That percentage increase becomes the COLA for the following year. For 2026, that number is 2.8%.
Although the number is larger than last year's, many retirees still feel it's not enough. The costs of housing, utilities, and medical care are all rising faster than the average inflation rate. Those expenses make up a larger part of seniors' budgets than they do for working-age city dwellers. So, it's no surprise that many retirees relying heavily on Social Security feel they're falling behind.
The average retirement benefit and the impact of the 2026 COLA
The age at which you claim Social Security benefits can have a significant impact on the amount you receive each month. It also impacts the size of each annual cost-of-living adjustment, since those raises are based on a percentage of your previous benefit amount.
While each age cohort includes some beneficiaries who claimed earlier, the addition of those delaying benefits steadily increases the average benefit received for each age group. It's important to note that not only do retirees who delay benefits receive an increase in their monthly payment for each month they delay, but they also accrue the annual COLA starting the year they become eligible for benefits. So, there's no missed opportunity for delaying.
The table below shows the average monthly Social Security retirement payment for beneficiaries aged 62 through 80 as of June 2025, the most recent data available from the Social Security Administration. It also shows how much the 2.8% COLA will increase the average benefit in nominal terms.
| Age | Average Social Security Benefit | 2026 COLA Amount |
|---|---|---|
| 62 | $1,377 | $38 |
| 63 | $1,392 | $39 |
| 64 | $1,447 | $40 |
| 65 | $1,612 | $46 |
| 66 | $1,808 | $51 |
| 67 | $1,962 | $55 |
| 68 | $2,003 | $56 |
| 69 | $2,052 | $57 |
| 70 | $2,187 | $61 |
| 71 | $2,157 | $60 |
| 72 | $2,138 | $60 |
| 73 | $2,125 | $59 |
| 74 | $2,092 | $59 |
| 75 | $2,084 | $59 |
| 76 | $2,097 | $59 |
| 77 | $2,082 | $59 |
| 78 | $2,089 | $58 |
| 79 | $2,056 | $58 |
| 80 | $2,038 | $57 |
Data source: Social Security Administration. Calculations by Author.
As expected, the average benefit amount increases in each cohort until age 70, after which it levels off. That's due to the ability to receive an increase in benefits up until age 70. Benefits decline for cohorts older than 70 due to the fact that average earnings have increased faster than the annual COLA in most years. (This is a sign of a healthy, expanding economy and real wage growth.)
Beneficiaries age 65 and older who are also enrolled in Medicare won't see the full COLA reflected in their monthly payment. That's because the government automatically deducts Medicare Part B premiums from Social Security checks. Those monthly premiums will increase $17.90 in January for most beneficiaries, eating into a significant chunk of the COLA for the average retiree. As a result, retirees may find they have to stretch their benefits even thinner in 2026.
