Let’s talk about the updates on the 2026 COLA (Cost of Living Adjustment) — the annual change that helps Social Security payments keep up with inflation. According to the latest projections, the 2026 COLA could bring a 2.7% increase in Social Security benefits. While it’s not a huge change, it would still mean a lot for retirees’ financial situation since they rely on this monthly income to cover everyday expenses.
Here’s a clear breakdown of what the COLA is, how it’s calculated, and how much payments could increase based on age. I’m sure millions of retirees across the United States are interested in this, so let’s get started!
What is COLA?
The COLA (Cost of Living Adjustment) is a yearly change made by the Social Security Administration (SSA) to make sure that people receiving benefits aren’t so affected by the rising prices caused by inflation. It is calculated using a government index known as the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), which measures how the cost of everyday essentials — like food, housing, transportation, and healthcare — changes over time.
Every year, the Social Security Administration (SSA) looks at how much prices have gone up between July and September compared to the same months the year before. For 2026, experts think the COLA increase will be about 2.7%, which is a little higher than the 2.5% increase people got in 2025.
How much will payments increase?
If the 2.7% COLA is confirmed, the average monthly benefit for retirees would increase from $2,005 to about $2,059. That’s roughly $54 more per month for the average retiree. While that may not sound like much, it’s an important boost for millions of seniors who face rising costs for groceries, utilities, and medical care.
Estimated payment increases by age
The amount of the increase depends on two main factors: The age at which you started collecting benefits and your lifetime earnings record.
In general, Social Security payments rise until age 70, since retirees who delay claiming benefits receive higher payments. After that, the growth levels off slightly.
Now, let’s have a look at a simple projection based on the estimated 2.7% COLA for 2026:
| Age | Current Average Benefit | Estimated 2026 Benefit (COLA 2.7%) | Monthly Increase |
| 62 | $1,480 | $1,520 | +$40 |
| 65 | $1,750 | $1,797 | +$47 |
| 67 | $1,910 | $1,961 | +$51 |
| 70 | $2,400 | $2,465 | +$65 |
| 75 | $2,170 | $2,229 | +$59 |
| 80 | $2,020 | $2,074 | +$54 |
Disclaimer: You should have in mind that these are average national estimates. Individual amounts vary based on work history and retirement timing.
Why COLA increases differ by age
This matter can be easily explained with two examples of different situations: If you begin at 62, your checks are smaller because you’ll get them for more years. However, if you wait until 70, your checks are larger (it is kind of like a reward for waiting to retire). Basically, Social Security gives bigger monthly payments to people who wait longer to become a retiree and start collecting their benefits.
That’s why older retirees usually see higher dollar increases, even though the COLA rate (2.7%) is the same for everyone.
2026 COLA and retirees
The 2026 COLA increase is a positive thing because it means inflation is stabilizing, but the government still recognizes that retirees need help keeping up with costs.
Even a modest 2.7% increase can make a difference by helping seniors:
- Pay for everyday expenses more easily.
- Keep up with medical and housing costs.
- Maintain their standard of living despite inflation.
In short, the COLA helps protect the real value of retirement benefits, ensuring that seniors don’t fall behind financially as prices rise.