We enter the last quarter of the year and that means that for 2026 adjustments have to be made, yes, the famous COLA is already being prepared for 2026. Millions of retirees will receive their Social Security checks next year with a little more money. Watch out, it is not a huge amount of money that will be added to the checks, but a little that will help mitigate the inflation of food, housing and health prices. It is called COLA (Cost of Living Adjustment) and for 2026 it will be 2.7% and 2.8%, about 55 dollars more each month, about 660 dollars for the whole year, not bad, right?
Why are the checks adjusted?
Each year the government reviews inflation with the consumer price index (CPI-W), which measures the cost of basic goods and services. If food, rents or medical expenses (which are the most important expenses) have gone up because of inflation, the payments also have to go up, it is not fair that those who depend on a monthly check (whether for retirement, disability or other issues) cannot maintain their standard of living.
With this adjustment retirees do not lose purchasing power even if inflation rises, the COLA keeps their income on par with real life (although in many cases it does not cover all needs).
How much is it?
The average Social Security payment is around 2,008 dollars per month. With the expected increase, it will go up to about 2,063 dollars per month. It is not much but it is 55 extra dollars each month, you can pay bills, medicine or a treat at the supermarket.
How does it compare with other years
- In 2024, the increase was 3.2%.
- In 2025, the adjustment was 2.5%.
The one in 2026 is at an intermediate point, there have been years when it exceeded 8% (because we were very bad with inflation), but this year is not as “bad” as some feared. Inflation has finally moderated and COLA must also do so.
When will it take effect?
The official announcement will be made in October when the third quarter inflation data is published, and it will be with the first check of 2026 that we will see the increase.
Have basic services gone up?
Medicare: many of its premiums are deducted directly from Social Security. If they go up, the improvement in the check will be smaller than expected.
Housing and food: two of the expenses that put the most pressure on retirees. In some cities, rent and the basic basket have grown much more than 2.7%.
The importance of COLA
We have to be aware that more than sixty million families depend on social security in the United States as the main basis of their economy, any increase, no matter how small, is good for these families.
COLA is the guarantee that the system, at least in theory, does not leave beneficiaries behind in the face of inflation. Maybe it is not much, 2.7% is not, but that also means that we are finally leaving inflation behind!
Key Tips!
- What happens? For 2026 the COLA will be at 2.7-2.8%.
- What is COLA? An adjustment made to mitigate inflation in Social Security payments.
- Who receives it? Those who receive money from SSA (retirees, disabled, etc).
- How much does it add in total? About 660 dollars per year.
- The reason? So that beneficiaries do not lose their purchasing power.
- When will it arrive? With the first payment of 2026.