The Social Security Administration (SSA) recently announced the cost-of-living adjustment (COLA) for 2026, and it turned out to be a 2.8% increase. The COLA is meant to help retirees keep up with the rising costs of the economy.
A lot of information has been posted about how this will affect retirement benefits, but not much focus has been given to spousal benefits. The good news is that, for married couples, there is a little more breathing room.
Government data suggest that the 2.8% increase will add approximately $1,000 per year to couples’ benefits. Now even though this may not seem like much, but for those living on fixed incomes, it makes a difference when it comes to paying for essential expenses.
How the COLA Works
Every year, the SSA makes adjustments to Social Security benefits based on an index called the Consumer Price Index (CPI-W). This tracks the spending pattern of working-class individuals.
When prices go up, benefits go up too. The goal is to make sure your Social Security income still buys about the same amount from year to year.
How Much More Will Couples Receive?
If a retired couple currently receives $3,800 per month combined, a 2.8% increase means they’ll get an extra $106 each month, that is approximately $1,272 over the course of a year.
Why This Raise Matters
There are many retires couples who rely on Social Security as their primary source of income. Research shows that approximately two-thirds of retirees rely on Social Security for at least half of their income and approximately 40% rely on it for all their income.
These increases help beneficiaries in covering costs for:
- Healthcare and insurance premiums
- Electricity bills
- Groceries and transportation
Therefore, it’s important to understand that the increase is not meant to make you a millionaire but rather help you keep up with daily expenses.
Does the 2.8% Keep Up with Inflation?
Since the COLA is based on the CPI-W index, it does not really reflect the true spending of retirees. The elderly population spend more on healthcare, medication and housing. This has increased faster than inflation has.
A report from The Senior Citizens League (TSCL) found that Social Security benefits have lost about 36% of their buying power since 2000.
Smart Ways to Use Your Extra Money
- Relook at your budget and try to cut down on unnecessary expenses.
- If possible, pay off small debts to reduce the monthly financial burden.
- Make sure you put money as emergency savings. This can help you with unexpected expenses one day.
- Look into other support programs.
What This Means for the Future
Yes, Social Security benefits have increased but prices of goods and services still remain high. Social Security alone is not enough for many retirees to live comfortably.
There are many officials discussing long-term solutions to sustain the program and make it stronger, however, as it stands, recipients struggle with the increasing costs of living.
The additional $1,000 or more annually gives married couples a little safety net that may be used to pay for essential expenses.
The Bottom Line
There are millions of American families who live on fixed incomes and rely on Social Security, therefore the 2.8% increase matters to them. Regardless of whether it’s big or small, the little still helps to cover essential expenses.
Even though it may not make a major difference to one’s lifestyle, it still assists with keeping up with inflation. A little increase, is better than no increase at all.
Beneficiaries are urged to plan ahead and budget accordingly, and where possible, look into other savings and investment options. This will allow for a more financially stable retirement.