There are millions of Americans who rely on Social Security as an important source of income. As October approaches, recipients are hopeful about the Cost-of-Living Adjustment (COLA), a yearly increase that helps retirees and other beneficiaries keep up with inflation.
Why Are Social Security Checks Increasing?
Annually, Social Security benefits are reviewed, and adjustments are made based on the increasing costs of goods and services. The measure that is used to calculate inflation is referred to as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This data is then used to determine the COLA for the following year.
This simply means that the costs of groceries, rent and healthcare is increasing, therefore, Social Security benefits should also increase. If these adjustments are not made, many people will have difficulty keeping up with inflation.
How Big Will the Raise Be?
There are predictions for COLA, and the values are expected to be approximately 2.7%-2.8%. Let’s understand what this means:
- Currently, the average Social Security benefit is approximately $2,008. A 2.8% COLA would result in an additional $55 per month, or about $660 more over a year.
Even though this may not seem as a large increase as compared to previous years, however, it will make a difference to households who are struggling on fixed incomes.
How This Raise Compares to Previous Years
Looking back helps put this increase into perspective:
- In 2024, beneficiaries saw a 3.2% raise.
- In 2025, the adjustment was 2.5%.
The values of 2.7% to 2.8% for 2026 just falls between the years above. This pattern shows that inflation is slowly cooling as compared to the high rates from the pandemic era. However, it’s important to note that people still need a little extra income to manage.
When Will People See the Increase?
The COLA for 2026 will be announced in October 2025 after the government has collected all the inflation data for the 3rd quarter of the year.
Social Security beneficiaries will start the increase from the January 2026, just a few months until the checks are increased.
What Could Eat into the Raise?
Even though the increase may be something to look forward to, there are still other premiums that might increase:
- Medicare premiums are deducted directly from the Social Security benefits and the increase in Medicare premiums will negatively impact your Social Security check.
- Housing and food: In many areas, rent, food, and utilities continue to be costly. Fixed earnings are severely impacted by these necessities.
In simple terms, even though the increase might help many, it still many not be sufficient all the other expenses that many retirees have.
Why This Matters
There are millions of Americans who bank on Social Security. Data shows that a large portion of retirees rely on Social Security to cover more than half of their household budget.
This why COLA adjustments are important. Whether it is a minor increase, it still makes a major difference in paying bills or falling behind on bills.
Final Thoughts
Millions of beneficiaries will welcome the 2.7% to 2.8% raise in Social Security checks. Even though it may not be a major increase especially in the era where the cost of living keeps increasing, it will still provide beneficiaries with the extra income to manage expenses.
As of January 2026, Social Security beneficiaries will see their monthly benefits increase. It’s more than just something on paper; this will provide peace of mind for millions as they would be able to keep with inflation.
Beneficiaries must keep updated with verified information while awaiting the official COLA announcement in October.