In October, more than 70 million Americans will learn how much their Social Security benefits will increase in 2026.
The annual cost-of-living adjustment — better known as the COLA — is projected to come in around 2.5%, assuming inflation, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), rises as expected during the third quarter of 2025.
For the average retiree collecting just over $2,000 per month, that 2.5% adjustment would translate to an increase of roughly $50 per month, or about $600 a year. Not a windfall, but a welcome bump for those living on fixed incomes.
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But here’s the catch: Medicare Part B premiums are going up, too.
In 2026, the standard monthly premium is expected to rise by at least $21.50. Since most beneficiaries have those premiums deducted directly from their Social Security checks, the net increase in monthly income will likely be closer to $28.50 — or about $342 for the year.
So while the headline COLA may be 2.5%, the real increase in take-home benefits — after accounting for Medicare Part B premiums — will be closer to 1.4%.
In other words, retirees will still get a raise, but inflation — and rising healthcare costs — will likely eat into the gains.
How Social Security calculates COLA
A quick refresher: Legislation enacted in 1973 provides annual COLAs so that Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation.
The COLA is calculated using a formula in the Social Security Act, which compares the average CPI-W for the third quarter (July through September) with the same quarter in the prior year. The CPI-W for Q3 2024 was 303.420.
The Bureau of Labor Statistics releases CPI-W data monthly, and the official COLA for 2026 is expected to be announced in mid-October.
Related: Millions of Medicare beneficiaries could see major price shock
For 2025, the COLA was also 2.5%.
Social Security benefits reflecting that increase began with the December 2024 payment, which was payable in January 2025.
Federal SSI payments increased by the same amount, effective for payments made in January 2025. And because January 1 is a holiday, SSI recipients saw that bump in their Dec. 31, 2024, payment.
The historic average COLA since 1975 has been 3.7%, but it has declined to 2.6% since 2000.
SSA
Of note, Social Security recipients receiving less than about $800 per month might be affected by the hold harmless rule if the 2026 COLA is 2.5%.
The “hold harmless” rule typically protects Social Security benefits from being reduced by Medicare premium increases if the COLA isn’t large enough.
AARP Survey: Americans worry about Social Security’s future — and its present
This forecast about the 2026 COLA comes on the heels of AARP’s release of a new survey marking Social Security’s 90th anniversary. The findings underscore growing anxiety about the program’s future and frustrations with its present.
At a press conference this week, AARP CEO Myechia Minter-Jordan noted that more than 69 million Americans — more than one in five people in the country — receive Social Security benefits, while over 183 million workers are currently paying into the system.
Among the key findings:
- 78% of respondents worry that Social Security won’t provide enough income to live on in retirement — up from 74% in 2020.
- 65% of current retirees say they rely heavily on Social Security to cover their expenses.
- 64% believe the current average benefit — around $2,000 per month — is too low.
- Only 25% of those under 50 express confidence in the program’s future, compared with 48% of those 50 and older.
- More than one-third of all respondents — including 42% of those ages 18 to 49 — incorrectly believe that Social Security will pay no benefits once the trust fund is projected to be depleted in 2034.
Related: Retired workers to see frustrating change to Medicare in 2026
The survey also spotlighted significant customer service challenges at the Social Security Administration (SSA):
- Long wait times: “Currently, about half of callers are waiting more than two hours to get a callback,” said Bill Sweeney, AARP’s senior vice president of government affairs.
- Delayed appointments: “Some people are waiting 35 to 40 days for a field office appointment just to get a basic question answered,” Sweeney added.
- Geographic access issues: In rural areas, especially in Alaska, “getting to a Social Security field office may mean getting on a plane,” said Sweeney, underscoring the logistical barriers some Americans face when seeking in-person help.
All in, the survey paints a picture of widespread reliance on Social Security — and rising concerns about whether the program will continue to deliver, both now and into the future.
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