Each year, the Social Security Administration reviews how inflation affects the everyday cost of living for retirees and other benefit recipients. For 2026, they’ve announced a 2.8% cost-of-living adjustment (COLA) to Social Security and Supplemental Security Income (SSI) benefits.
That means nearly 71 million Americans will see their monthly payments increase beginning in January 2026.
What This Means for Retirees
This adjustment is intended to help Social Security beneficiaries keep pace with inflation. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure that tracks price changes for goods and services commonly purchased by consumers. In short, it’s meant to help ensure your purchasing power isn’t eroded as prices rise.
Currently, the average retired worker receives about $2,015 per month, or roughly $24,180 per year in Social Security benefits. A 2.8% increase translates to an additional $56 per month, about $672 more per year.
A Few Important Reminders
All federal benefits must now be directly deposited into a bank or financial institution. If you haven’t yet set up electronic deposits, you’ll need to do so before receiving benefits.
While this increase is welcome news, it's just one piece of your larger financial picture. The COLA may affect your retirement income strategy, tax planning, or Medicare premiums in subtle ways. The COLA may affect your retirement income strategy, tax planning, or Medicare premiums in subtle ways, so it’s wise to review your plan with your financial adviser.
At GDS Wealth Management, we help clients navigate changes like these, reviewing how adjustments may affect overall income, tax exposure, and long-term financial security.
If you’d like to understand how the 2026 COLA could impact your retirement income and financial plan, consider scheduling a review with your GDS adviser. We’re here to help you make confident, informed decisions about your future.
Source: Social Security Administration
The consumer price index for urban wage earners and clerical workers is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.
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