As of October, more than 70 million Americans will be made aware of how much more they will receive in the Social Security monthly payments for 2026. The annual cost-of-living adjustment (COLA) is projected to be around 2.5%, based on information tied to inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The COLA helps beneficiaries keep up with the rising costs of inflation.
If that prediction holds true, the average retiree who is currently receiving just over $2,000 per month, would see a monthly increase of about $50, adding to an extra $600 a year. For many seniors living on fixed incomes, it’s not a huge increase.
The Medicare Deduction Dilemma
It is important to note that there is a catch that could potentially decrease how much beneficiaries actually receive, rising Medicare premiums. The standard monthly premium for Medicare Part B is expected to increase by at least $21.50 in 2026.
Since most beneficiaries have this amount deducted directly from their Social Security payments, the real monthly increase would likely be closer to $28.50 or approximately $342 per year. That reduces the effective raise nearly in half, leaving retirees with a net increase of about 1.4% instead of the full 2.5%.
How the COLA Is Calculated
Every year the Social Security Administration (SSA) uses a specific formula determine the COLA. It compares the average CPI-W for the third quarter of the year (July through September) to the same quarter from the previous year.
In the year 2024 that CPI-W figure for Q3 was 303.420. The official 2026 COLA announcement will be made in mid-October 2025. Once announced, the increased benefit will first be reflected in the December 2025 payment, which is paid in January 2026.
SSI recipients, on the other hand, usually see their boost slightly earlier. Because January 1 is a federal holiday, those payments are typically deposited on December 31.
Hold Harmless Rule Offers Limited Protection
The “hold harmless” rule is a rule which ensures that Social Security checks won’t go decrease if Medicare premium increases outpace the COLA. This rule could come into play in 2026, especially for those receiving less than $800 per month. However, not all recipients are protected by this rule, so its impact is limited.
As of1975, the average COLA has been around 3.7%, since 2000 that average has decreased to just 2.6%, this shows lower long-term inflation rates and putting more pressure on retirees managing rising costs with minor increases.
Americans Concerned About Social Security’s Future
The AARP survey underlines growing concerns about both the present and future of Social Security. Data from the survey reveals a sense of unease among Americans of all ages.
According to the data:
- 78% are concerned Social Security won’t provide enough to live on in retirement.
- 65% of retirees say they heavily rely on their monthly benefit.
- 64% believe the average benefit isn’t enough.
- Only 25% of people under 50 are confident in the program’s long-term future, compared to 48% of those 50 and older.
- Alarmingly, over one-third of participants mistakenly believe that once the trust fund is depleted in 2034, no benefits will be paid out.
SSA Customer Service Under Pressure
Apart from the financial concerns, Americans are also upset with the customer service of the SSA. The AARP report points to severe operational issues, including:
- Wait times exceeding two hours for callbacks.
- Delays of over a month for basic field office appointments.
- Challenges relating to access in rural areas
A Program Millions Rely On — But Change Is Needed
There are approximately more than 69 million Americans who rely on Social Security as their financial backbone and there are more than 183 million workers who pay into the system. However, as inflation increases, the pressure of protecting the program also increases. It is important to understand that Social Security serves people who depend it on the most.