Social Security beneficiaries may receive a 2.4% increase in their payments beginning in January 2026, according to recent estimates by the Senior Citizens League. For retired Social Security benefits recipients, that means checks could increase by an estimated $47 in January, rising from $1,968 to $2,015.
Every October, the Social Security Administration reveals its annual cost-of-living adjustment, also known as COLA, based on inflation data from the U.S. Bureau of Labor Statistics. The 2026 estimated adjustment would be the lowest since 2021, when the COLA was 1.3%.
As Americans look ahead to benefit increases in 2026, it can be helpful to understand:
— How the Social Security COLA is determined
— How the Social Security COLA changes
— Ways for Social Security beneficiaries to earn more
— How to prepare financially for COLA
How the Social Security COLA Is Determined
To determine the annual COLA, the Social Security Administration reviews the percentage changes in the consumer price index for urban wage earners and clerical workers, or CPI-W, during the third quarter from one year to the next. This information is applied to the calculations for the upcoming COLA.
If the CPI shows low rates, it is an indicator that living expenses for Americans, on average, have not increased significantly over the last few months. Higher rates reflect rising costs and steeper inflation. “Ultimately, the Social Security Administration determines its cost-of-living adjustment based on its expectations for the rate of inflation in the next year,” said Krieg Tidemann, assistant professor of economics at Niagara University, in an email.
The idea is to help retirees have enough to cover their annual needs.
[Read: Retirement Challenges in 2025: Market Volatility, Inflation and Social Security]
How the Social Security COLA Changes
Some experts predict the COLA for the following year before it is officially announced. The Senior Citizens League, for instance, correctly estimated in September 2024 that the COLA would be 2.5% for 2025, down from its July estimate of 2.57%.
In 2024, the Social Security Administration indicated the COLA would increase by 2.5% in 2025. Beginning in January 2025, checks reflecting those increases were sent to the more than 69 million retirees who receive Social Security benefits.
In 2023, the COLA increased by 8.7%, its largest increase since 1981. This followed a 5.9% increase in 2022, which was the highest in four decades. A check of $1,000 in 2021 would have increased to $1,059 in 2022. Following the COLA of 2023, the amount would have gone up by an estimated $92 to a $1,151 payout. The additional 3.2% bump resulted in a $37 increase on the 2023 payout, bringing the benefit amount to $1,188 in 2024. For 2025, checks going to retired Social Security recipients are estimated to increase by $47, rising from $1,920 to $1,968. If the current 2.4% estimate holds, benefits in 2026 will rise to $2,015.
| Year It Takes Effect | COLA |
| 2026 | 2.4% estimated |
| 2025 | 2.5% |
| 2024 | 3.2% |
| 2023 | 8.7% |
| 2022 | 5.9% |
[Read: How Raising the Retirement Age Could Help or Hurt Seniors]
Monitoring the Consumer Price Index
According to the U.S. Bureau of Labor Statistics, the CPI-W for April 2025 increased 0.2% on a seasonally adjusted basis. All items increased by an average of 2.3% during the previous 12 months. Overall, inflation in 2024 was lower than in 2022, which saw 40-year highs in June of that year.
The CPI can be continually monitored to make future estimates. “Remember that COLA is directly tied to inflation,” said Jeremy Keil, a financial advisor at Keil Financial Partners in New Berlin, Wisconsin, in an email. “The only reason COLA was so high in 2022 and 2023 is because inflation was so high in 2021 and 2022.”
While inflation may not return to previous extremes, the Federal Reserve projects it will remain elevated for the remainder of 2025 due to recent trade disputes and tariffs enacted by the Trump administration.
[Read: Social Security COLA 2025: What to Do With the Extra Money]
Ways for Social Security Beneficiaries to Earn More
The COLA increases in recent years may be helping retirees cope with current costs. That said, some individuals may decide they need more income to support their lifestyles. Taking a part-time job can help retirees bring in additional income. For retirees who prefer flexible remote work, many jobs can be done entirely online.
If you take benefits and have a job before your full retirement age, you can earn up to a certain amount. If your income exceeds that amount, your benefits will be reduced. Once you reach your full retirement age, there won’t be limitations on what you can earn. Additional supplemental income could come from retirement accounts such as a 401(k), IRA or pension.
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What Will the Social Security COLA Raise Be for 2026? originally appeared on usnews.com
Update 05/14/25: This story was published at an earlier date and has been updated with new information.
