2026 Social Security COLA
Key Takeaways
- More than 72 million Americans will see a 2.8% Cost-of-Living Adjustment (COLA) in their Social Security payments starting January 2026.
- The average monthly benefit will rise by about $56 to $2,071—close to the 20-year historical average increase.
- Higher Medicare premiums and a new $184,500 Social Security wage cap could affect both retirees and workers.
Understanding the 2026 Social Security Increase
On Friday, October 24, the Social Security Administration announced that more than 72.5 million Americans will see a 2.8% Cost of Living Adjustment (COLA) to their benefits in 2026. This adjustment is designed to help your Social Security payments keep up with the rising cost of living.
How Much More Will You Receive in 2026?
Starting in January 2026, the average Social Security check will increase by about $56 per Month and result in an average monthly payment of $2,071. The 2026 increase is less than recent COLA increases since 2020, but a bit more than the 2.5% increase for 2025 and is in line with historical averages (the average is 2.6% over the past 20 years).
What Drives the Annual COLA Adjustment?
The annual COLA is based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some senior advocacy groups argue that using an index that more accurately reflects the spending habits of older Americans would provide better adjustments, especially as many continue to face challenges with rising costs.
For about 40% of older Americans, Social Security is their primary source of income.
Estimating Your 2026 Social Security Benefit
To estimate your new monthly benefit, multiply your current payment by 2.8%. Keep in mind that Medicare premiums could also affect the final amount. For instance, the standard Medicare Part B premium is expected to rise to $206.5 per month in 2025, up from $185 in 2025, so stay tuned while we keep an eye out for any & all announcements!
Key Changes to the Social Security Wage Cap
Lastly, if you’re still working, then you should know that the Social Security tax wage cap will be $184,500 for 2026, up from $176,100 in 2025. This is the limit on how much of a worker’s wages are subject to Social Security taxes. It’s also indexed to inflation and has been increasing for the past several years and is expected to increase again in 2027.
If you have any questions about these changes or how they impact you, please reach out to your ACM Wealth Advisor.
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