From each year to the next, a number of variables in the Social Security program undergo changes relative to inflation or changes in average wages. The most anticipated announcement of change is the annual Cost of Living Adjustment (COLA) which reveals the exact percentage by which benefits will be increased in the new year.
On October 24th, the Social Security Administration (SSA) announced a 2.8% increase for all benefits starting in January 2026. Along with this benefit increase, the maximum taxable earnings limit, as well as the value of one work credit will also be increasing in the new year.
Furthermore, a new proposal is being drafted by the Trump Administration which, if passed, could result in hundreds of thousands of beneficiaries losing their eligibility, causing them to be cut off from their benefits. Here is what you need to know.
2.8% COLA increase may fall short
Despite the ongoing shutdown of the U.S. federal government, the Bureau of Labor Statistics made a special concession and released the September CPI so as to allow the SSA to determine and announce the 2026 COLA increase. The 2.8% COLA increase will bring add around $56 to the average benefit check. The 2026 COLA increase is marginally higher than the 2025 COLA increase which brought seniors across the country a 2.5% boost this year. Both COLAs can be considered as below average when compared to the COLAs of the last decade.
Findings in a report from The Senior Citizens League has revealed that “seniors on Social Security have lost 20% of their buying power from 2010 to 2024.” As such, experts and advocates fear that the 2.8% benefit bump for 2026 will not be enough to truly address rising costs.
According to the Medicare annual report, the Part B premium, which is automatically deducted from benefits, is projected to face a hefty 11.6% increase in 2026. This would add around $21.50 to the cost of the premium, which will in turn significantly reduce the value of the COLA increase before beneficiaries even receive their checks. While the 11.6% premium hike is only a projection and the actual figure could still change, it is more than likely that the premium cost will face an increase in the new year.
Advocates such as The Senior Citizens League believe that the reason why the COLA often falls short for most seniors lies with the manner in which it is calculated.
“The COLA is currently calculated with the CPI-W, a price index that tracks inflation for people who work and live in cities. Instead, it should be using the CPI-E, which is designed to reflect seniors’ budgets and tends to come in slightly higher than the CPI-W. On average, the CPI-E comes in about 0.1 percentage points higher than the CPI-W,” TSCL explains.
Trump Administration proposal could cut benefits for many
In pursuit of cost cutting, the Trump Administration has drafted a proposal that would remove certain factors as eligibility determiners for disability benefits. As a result, hundreds of thousands of disability benefit recipients could potentially have their benefits reduced, if not lost entirely, if this proposal is passed.
The proposal aims to have age removed as a determining factor for disability benefits applications. Currently, age is taken into consideration for disability benefit applications as it is considered as a limiting factor at a number of jobs. The Trump Administration’s proposal aims to increase the age threshold from 50 to 60.
The Trump Administration is also looking at reversing some changes made during the Biden Administration regarding qualifiers for public assistance households. This could result in hundreds of thousands of SSI beneficiaries having their benefits reduced, with some even facing the possibility of losing eligibility entirely.
“The changes would remove or reduce the benefits of about 400,000 people currently receiving SSI benefits,” as per estimates from the Center on Budget and Policy Priorities.