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Social Security Benefits Set to Rise by 2.8% in 2026: What You Need to Know
Good news for the roughly 75 million Americans relying on Social Security and Supplemental Security Income (SSI)! The Social Security Administration (SSA) has officially announced a 2.8% cost-of-living adjustment (COLA) for 2026. This increase aims to help your benefits keep pace with the rising costs of everyday goods and services.
For most beneficiaries, this COLA will apply to payments received in January 2026. However, those on SSI will see their first payment with the new COLA amount a bit earlier, on December 31st, 2025.
What Does a 2.8% COLA Mean for Your Check?
Let’s break it down. COLA is applied to your gross benefit, which is the amount before any deductions like Medicare premiums or taxes.
For example, if your current monthly benefit is $1,700, a 2.8% COLA will add approximately $47.60 to your check each month. This brings your new gross benefit to $1,747.60 for January 2026.
Over the course of a full year, that’s an additional $571 in total benefits. The best part?
This adjustment is automatic, so no paperwork is required on your end.
The SSA calculates the COLA based on third-quarter inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). You’ll receive a personalized COLA notice detailing your exact 2026 amount. These notices will be available in your “my Social Security” account in late November or sent via mail in December.
Why Your Deposit Might Be Less Than Expected
While the gross benefit increases, your actual net deposit might see a smaller bump. This is primarily due to Medicare deductions.
Most retirees have their Medicare Part B premium, and sometimes Part D or a Medicare Advantage plan premium, deducted directly from their Social Security checks. If this applies to you, your net deposit will be lower than the full $47.60 increase.
Medicare releases its new year’s premiums each fall, and your “my Social Security” account will display your personal deductions, including any Income Related Monthly Adjustment Amount (IRMAA).
Additionally, many individuals opt to have federal taxes withheld from their Social Security benefits. You can choose to have a flat percentage (7%, 10%, 12%, or 22%) withheld to avoid a large tax bill later. If you don’t have Medicare deductions and haven’t chosen federal tax withholding, then you can expect to see the full gross COLA increase in your deposit.
How Does 2026’s COLA Compare to Previous Years?
This year’s 2.8% COLA follows 2.5% in 2025 and 3.2% in 2024. The notable outlier was 2023, which saw an 8.7% COLA driven by a significant inflation spike. While the 2026 increase might not be as dramatic, it’s still crucial for helping to offset rising prices for goods and services.
It’s also important to remember that COLAs compound. Each year’s increased gross benefit becomes the base for the next year’s adjustment, helping to protect your purchasing power over time, even with deductions and rising costs.
Factors That Can Absorb Your COLA Raise
While the COLA is a welcome boost, certain expenses can quickly diminish its impact. The CPI-W, which determines COLA, tracks general worker spending patterns.
However, your individual costs, especially for categories like shelter, food, utilities, and medical care, can often rise faster than overall inflation. For instance, increased electricity bills or new prescription medications can quickly eat into that extra $47.60.
Health costs, in particular, are a significant factor. If your Medicare Part B premium or IRMAA surcharge increases for 2026, your net deposit won’t reflect the full $47.60 increase, even if it’s still part of your gross monthly figure. To best prepare, review your COLA notice as soon as it’s available, taking into account all deductions to adjust your budget accordingly.
Working While Collecting? Remember the Earnings Test
If you’re under your full retirement age (FRA) and still working, the retirement earnings test can temporarily withhold benefits if your income exceeds annual limits. For 2026, these exempt amounts are $24,480 if you’re under FRA all year, and $65,160 in the year you reach your full retirement age. The SSA withholds $1 for every $2 earned over these limits (or $1 for every $3 in the year you reach FRA).
This withholding is automatic and can significantly reduce or even temporarily stop your checks. However, this money isn’t lost. At FRA, your benefit is adjusted to credit the withheld months, increasing your baseline amount.
When Will Your Increased Benefit Arrive?
The COLA increase for Social Security benefits is applied in December, with payments reflecting the change in January. For SSI, the change takes effect on December 31, 2025, as payments typically go out on the first of the month, and January 1st is a federal holiday.
To see your precise deposit amount, log into your “my Social Security” account and access your COLA notice. Confirm your new gross benefit (using our example, $1,747.60), then review your Medicare and tax lines to determine your actual net deposit.
Make This Year’s Raise Work for You
Once you know your true net increase, consider how to best utilize those extra dollars. If your deposit is up by the full $47.60, direct most of it towards a creeping expense like a prescription copay or groceries.
If Medicare premiums reduce your net benefit, you might consider temporarily trimming a flexible expense to help balance the difference. Also, double-check your tax withholding to ensure you’re not setting aside too much or too little of your benefit.
For those facing significant medical costs, even after the COLA, use Medicare’s plan finder during open enrollment to explore if a different Part D or Medicare Advantage plan could offer savings next year.
The Bottom Line
The 2026 COLA adds approximately $47.60 per month to a $1,700 Social Security benefit, bringing the gross amount to $1,747.60 and an annual gross increase of about $571. However, this is before any deductions for taxes or Medicare premiums.
To get your exact numbers and your actual net deposit, remember to sign into your “my Social Security” account and review your COLA notice in late November. With this information, you can accurately adjust your budget and ensure you’re making the most of your senior benefits.