The Social Security Administration (SSA) has been undergoing a slew of changes recently. Amongst the more notable changes has been the introduction of the Social Security Fairness Act which effectively restored full benefits to a cohort of public sector employees.
Additionally, projections for the 2026 Cost of Living Adjustment have also begun circulating, however, this figure will only be calculated for certain later in the year.
Here is what you need to know.
Big change for Social Security beneficiaries
At the beginning of the year, former President Joe Biden signed into effect the Social Security Fairness Act which would allow public sector workers to have their full benefits restored to them. This group previously had their benefits reduced or, in some cases, eliminated entirely as a result of two provisions that had been in place. By signing the Social Security Fairness Act into law on January 5th, the two provisions — the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) — were effectively repealed.
Around 2.8 million people will be impacted by the Fairness Act, including “teachers, firefighters, and police officers in many states, federal employees covered by the Civil Service Retirement System, and people whose work had been covered by a foreign social security system,” according to the Social Security Administration.
Subsequently, these individuals will see a bump in their monthly benefit amounts, along with another bit of good news. Since the the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) have been repealed, the impacted cohort will also be welcoming a lump sum retroactive back payment dating back to January 2024. According to an update from the agency, around 91% of the impacted cases have already been adjusted.
2026 COLA projections
The effects of inflation impacts all individuals with no discrimination. As such, retirees who are on a fixed income such as Social Security need to have their benefits adjusted accordingly so as to keep up with the effects of inflation. This adjustment is known as the Cost of Living Adjustment, or the COLA, and it is calculated annually.
The Cost of Living Adjustment is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) of the third quarter of each year. “The SSA COLA is not a mystery, it is based on the CPI-W,” explains Brooke Petersen, CFP, ChFC and wealth consultant at Conrad Siegel. “The COLA is based on the percentage increase in the CPI-W from the third quarter of the previous year to the third quarter of the current year.”
For 2025, the COLA was calculated to be a 2.5% increase. As a result, beneficiaries would have seen a bump of approximately $50 to their monthly checks as of January.
Since we have reached the halfway mark of the year, COLA predictions for 2026 have begun emerging.
Using current inflation trends, a nonpartisan Senior Citizens League has projected the COLA for 2026 to be around 2.4% in May. For a beneficiary who receives the average benefit amount of $1,950 each month, a 2.4% increase would mean an additional $46.80 each month. This accumulates to an additional $561.60 annually and as a result, the new average Social Security benefit amount will be raised to $1,996,80.
However, on June 11, the Senior Citizens League updated this figure to be 2.5%, which means 2026 could potentially have the same COLA as 2025 — and if inflation spikes further during the time of calculation, the COLA for 2026 could end up being even higher. Each COLA is a permanent increase to your monthly benefit amount, so whilst a 2.5% increase may seem like an insignificant adjustment, these small increases do eventually accumulate over the years of your retirement.
The COLA for 2026 will be announced by the SSA later this year, in October.