Since the official COLA announcement has been made (despite delays due the federal government shutdown), the tens of millions of beneficiaries in the Social Security program can now plan their 2026 budgets with the knowledge that their Social Security benefits will be increased by 2.8%.
The COLA, which stands for Cost Of Living Adjustment, is an annual increase implemented to all benefits issued by the Social Security Administration (SSA). This increase is not implemented at random, but rather it is done with the aim of countering the effects of year over year inflation. In short, the COLA increase allows each benefit check to retain its buying power if the cost of goods and services increases from one year to the next, which it does tend to do.
At the beginning of the year, the 2025 COLA brought seniors across the country a 2.5% benefit bump, and now the 2026 COLA will increase benefit checks by 2.8% as of January 2026. Since the COLA is a percentage increase and not a set dollar amount increase, the actual amount any one beneficiary will receive is likely going to differ from the next.
As such, residents of some states will be receiving a higher increase than others, and this all ties back to how benefits are calculated. Here is what you need to know.
How is the COLA determined?
Each year, the SSA announces the COLA in October, which may seem like an odd time to make the announcement if the increase is only going to be implemented in January. The COLA is determined by measuring the CPI-W for the third quarter of the current year against the CPI-W for the third quarter of the previous year. If there is an increase, this becomes the next COLA. As such, the SSA announces the COLA as soon as the data used in the calculation becomes available — and this happens in October.
A 2.8% COLA increase will bring around $56 more to the average benefit check in January 2026. Since benefit amounts differ from beneficiary to beneficiary, and the COLA is a percentage increase, some beneficiaries will receive a bigger benefit increase than others.
How are benefits calculated?
Throughout your working career, you will contribute a portion of your earnings towards the Social Security payroll tax in order to earn work credits, which will then allow you to become eligible for benefits upon retirement. The SSA’s calculation takes 35 of your highest earning years into consideration when determining how much it will pay you in benefits.
Whilst your lifetime earnings are the primary determining factor of how much you will receive in benefits, other factors such as age and additional income could also impact your benefit amount.
States with the highest COLA increase for 2026
Since the COLA is a percentage increase and benefits are primarily tied to the recipient’s lifetime earnings, some beneficiaries will naturally receive a bigger check than others when the increase goes into effect. Regardless of benefit amount, every beneficiary will be receiving a 2.8% increase. Some recipients may receive the average $56 increase, whilst others may receive less and some will even receive more.
States with higher median incomes will see their retirees receiving higher COLA increases when compared to states with lower median incomes. Listed below are the top ten states that will be receiving the highest COLA benefit bump in 2026, relative to the median benefit for retirees in each respective state:
1. New Jersey
2025 retired worker median benefit = $2,099.70
Median benefit after 2026 COLA increase = $2,158
2. Connecticut
2025 retired worker median benefit = $2,083.70
Median benefit after 2026 COLA increase = $2,142
3. Delaware
2025 retired worker median benefit = $2,064
Median benefit after 2026 COLA increase = $2,122
4. New Hampshire
2025 retired worker median benefit = $2,039
Median benefit after 2026 COLA increase = $2,096
5. Maryland
2025 retired worker median benefit = $2,007.70
Median benefit after 2026 COLA increase = $2,064
6. Michigan
2025 retired worker median benefit = $2,004.70
Median benefit after 2026 COLA increase = $2,061
7. Washington
2025 retired worker median benefit = $1,991.70
Median benefit after 2026 COLA increase = $2,047
8. Minnesota
2025 retired worker median benefit = $1,981.70
Median benefit after 2026 COLA increase = $2,037
9. Indiana
2025 retired worker median benefit = $1,952.70
Median benefit after 2026 COLA increase = $2,007
10. Massachusetts
2025 retired worker median benefit = $1,946
Median benefit after 2026 COLA increase = $2,000