Every year, Social Security benefits are adjusted for inflation through the Cost of Living Adjustment (COLA). Here's what you need to know about the 2026 increase.
In this article, we'll cover:
- What COLA is
- The 2026 COLA increase
- How it affects your payment
- When changes take effect
1. What COLA Is
Definition: Cost of Living Adjustment (COLA) is an annual increase to Social Security benefits designed to keep up with inflation.
Why it exists:
- Protects purchasing power
- Adjusts for rising prices
- Ensures benefits maintain value
- Applied automatically
How it's calculated:
- Based on Consumer Price Index (CPI-W)
- Compares third quarter prices year-over-year
- Percentage increase applied to benefits
- Announced in October, effective January
Who receives it:
- All Social Security recipients
- SSI recipients
- SSDI recipients
- Retirement beneficiaries
- Survivor beneficiaries
2. The 2026 COLA Increase
The numbers:
- Check ssa.gov for the official 2026 COLA percentage
- Announced in October 2025
- Applied to January 2026 payments
- Same percentage for all programs
Historical context:
- COLAs have ranged from 0% to over 8%
- Depends on inflation that year
- 2024 was 3.2%
- 2023 was 8.7%
What affects the COLA:
- Overall inflation rate
- Specific items in CPI-W
- Housing, food, energy, medical costs
- Year-to-year comparison
Important: COLA is automatic—you don't need to do anything to receive the increase.
3. How It Affects Your Payment
For SSI:
- Federal benefit rate increases
- State supplements may or may not increase
- Example: If COLA is 2.5%, $967 becomes ~$991
- Actual amount depends on your situation
For SSDI:
- Your specific benefit increases
- Based on your current amount
- Example: 2.5% COLA on $1,500 = $1,538
- Calculated automatically
Medicare impact:
- Medicare premiums often increase too
- Part B premium may rise
- Can offset some of your COLA
- Check your net change
The math:
- Start with current gross benefit
- Apply COLA percentage
- Subtract any new deductions
- Result is new net payment
4. When Changes Take Effect
Timeline:
- October: COLA announced
- December: SSA sends notices with new amounts
- January: New amounts take effect
- First payment: SSI on January 1, SSDI based on birth date
What to watch for:
- Notice from SSA in December
- My Social Security update
- First adjusted payment in January
- Verify correct amount received
If something seems wrong:
- Compare to SSA notice
- Check for new deductions
- Contact SSA if discrepancy
- Don't assume errors will fix themselves
Impact on Other Programs
SSI and SSDI interaction:
- If you receive both, both adjust
- SSI may change more (flat amount increase)
- Net effect depends on your situation
- Recalculated together
Other benefits:
- SNAP (food stamps) may adjust
- Housing assistance may recalculate
- State benefits have their own rules
- More income might affect eligibility
Resource limits:
- SSI resource limit ($2,000) doesn't automatically increase with COLA
- Hasn't changed since 1989
- Congress must act to change it
- COLA doesn't affect this
Planning for COLA
What to do:
- Note the announcement in October
- Review your December notice
- Check January payment
- Update your budget
Don't forget:
- Other costs may increase too
- Rent, utilities, food
- COLA helps but may not cover all increases
- Budget adjustment may still be needed
How Purple Helps
Purple keeps you informed:
- Clear view of deposit amounts
- See changes month to month
- Track your benefit increases
- Early access to payments
- Easy comparison to prior months