Social Security recipients could see a 2.7% COLA increase in 2026, boosting average monthly payments by about $50 starting in January (Photo: Pinterest)
Millions of Americans dependent on Social Security could soon expect some small financial improvement associated with inflation and applying to benefit amounts in 2026, this annual cost-of-living adjustment (COLA) is somewhat routine.
Social Security benefits are reassessed annually for inflation increases. That reassessment or readjustment is called the Cost-of-Living Adjustment or COLA which varies depending on consumer price changes. The measure is majorly based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) tracked by the Bureau of Labor Statistics (BLS).
The AARP.org will announce the official 2026 COLA rate on October 24 when the publication of September inflation data by BLS occurs. This announcement was shifted from the announcement power originally expected on October 15 due to the ongoing standoff regarding funding of the federal government.
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Even with reporting delays, benefit increases will be made continuously effective January 1, 2026, for almost 75 million Americans confirmed by the Social Security Administration.
Currently with the CPI-W for August standing at around 2.8%, their speculation has it that the final COLA figure might rest between 2.6% and 2.7%, assuming that inflation remains level in the month of September. This will be slightly better than the 2025 adjustment of 2.5% for the typical retiree that gets $1,864.64 monthly on average, it would be around $50 more each month.
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2026 may see a small adjustment, this adjustment represents a more stable inflation environment. In contrast, 2023 saw an unusually high COLA of 8.7%, really pushed by record levels of inflation. These adjustments are based on data from the third quarter July, August and September CPI-W numbers form the last piece of the puzzle now missing.
For older folk and handicapped people that live on Social Security, even such a minor boost can give meaningful relief since prices are hiking in essentials like healthcare and housing another $50 beginning in January may offer some financial space.
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