Social Security Announces New Cost-of-Living Adjustment (COLA) Checks – What You Need to Know
The Social Security Administration (SSA) has announced a new Cost-of-Living Adjustment (COLA) for the upcoming year, designed to help recipients manage rising inflation and increased living costs. Millions of Americans, particularly seniors, are set to benefit from this adjustment.
This year’s COLA represents a 2.8% increase, which is lower than last year’s historic 8.7% rise. Over 70 million beneficiaries, including retirees, disabled individuals, and others who rely on Social Security, will experience changes in their monthly payments starting in January 2026.
Key Details:
- Effective Date: The new COLA will be reflected in checks starting in January 2026.
- Average Monthly Benefit: The average retired worker will see their monthly benefit increase by approximately $56, bringing the average benefit to $2,071.
Predicted Benefits With COLA 2026 for age 54-65+ :
Based on current estimates, here’s what you can expect from Social Security benefits by 2026:
| Tax Rate | 2025 | 2026 |
|---|---|---|
| Employee | 7.65% | 7.65% |
| Self-Employed | 15.30% | 15.30% |
NOTE: For most employees, the standard FICA tax withholding totals 7.65 percent, a figure that combines contributions for two federally mandated programs. Specifically, 6.2 percent is allocated to Social Security (OASDI) expenses up to the current taxable wage base limit, while a flat 1.45 percent is applied to all gross income for Medicare (HI) coverage. It is crucial for high-income earners to note a distinct tier introduced in 2013: taxpayers with earned income exceeding 200,000 (250,000 for married couples) incur an Additional Medicare Tax of 0.9 percent. This surcharge is calculated separately and is not reflected in the base 7.65 percent rate.
| 2025 | 2026 | |
|---|---|---|
| Maximum Taxable Earnings | ||
| Social Security (OASDI only) | $176,100 | $184,500 |
| Medicare (HI only) | No Limit | |
| 2025 | 2026 | |
|---|---|---|
| Quarter of Coverage | ||
| $1,810 | $1,890 | |
| 2025 | 2026 | |
|---|---|---|
| Retirement Earnings Test Exempt Amounts | ||
| Under full retirement age | $23,400/yr. ($1,950/mo.) |
$24,480/yr. ($2,040/mo.) |
| NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit. | ||
| The year an individual reaches full retirement age | $62,160/yr. ($5,180/mo.) |
$65,160/yr. ($5,430/mo.) |
| NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. | ||
| Beginning the month an individual attains full retirement age | None | |
| 2025 | 2026 | |
|---|---|---|
| Social Security Disability Thresholds | ||
| Substantial Gainful Activity (SGA) | ||
| Non-Blind | $1,620/mo. | $1,690/mo. |
| Blind | $2,700/mo. | $2,830/mo. |
| Trial Work Period (TWP) | $1,160/mo. | $1,210/mo. |
| 2025 | 2026 | |
|---|---|---|
| Maximum Social Security Benefit: Worker Retiring at Full Retirement Age | ||
| $4,018/mo. | $4,152/mo. | |
| 2025 | 2026 | |
|---|---|---|
| SSI Federal Payment Standard | ||
| Individual | $ 967/mo. | $ 994/mo. |
| Couple | $1,450/mo. | $1,491/mo. |
| 2025 | 2026 | |
|---|---|---|
| SSI Resource Limits | ||
| Individual | $2,000 | $2,000 |
| Couple | $3,000 | $3,000 |
| 2025 | 2026 | |
|---|---|---|
| SSI Student Exclusion | ||
| Monthly limit | $2,350 | $2,410 |
| Annual limit | $9,460 | $9,730 |
| Before 2.8% COLA | After 2.8% COLA | |
|---|---|---|
| Estimated Average Monthly Social Security Benefits Payable in January 2026 | ||
| All Retired Workers | $2,015 | $2,071 |
| Aged Couple, Both Receiving Benefits | $3,120 | $3,208 |
| Widowed Mother and Two Children | $3,792 | $3,898 |
| Aged Widow(er) Alone | $1,867 | $1,919 |
| Disabled Worker, Spouse and One or More Children | $2,857 | $2,937 |
| All Disabled Workers | $1,586 | $1,630 |
Why It Matters:
The COLA is designed to help Social Security beneficiaries keep up with inflation. Rising living costs, especially for essentials like food, healthcare, and housing, disproportionately affect those on fixed incomes. While this year’s increase provides some relief, many argue it may not fully offset actual expenses, particularly for medical care.
What You Should Do:
- Check Your Benefit Amount: You can expect to receive your updated benefit amount starting in January. Make sure your payment reflects the new COLA increase.
- Stay Informed: The SSA will send out notifications detailing your new benefit amount in December, so be on the lookout for official updates.
For more details on the Social Security COLA and how it impacts you, visit the official SSA website or check trusted resources like AARP and Medicare.gov.
Discover how Trump’s proposed Social Security tax changes could affect retirees in our article, “Top 10 States Where Retirees Benefit Most and Least.” We break down tax relief potential by state, highlighting savings in retirement-friendly locations and where benefits may fall short. Essential for planning a financially secure retirement.
