The Social Security Administration on Friday announced a 2.8% increase 2026 cost-of-living adjustment (COLA) for 2026.
75 Million Americans Affected
The COLA will affect 75 million Americans, including retirees, their spouses, survivors, and those receiving disability benefits and Supplemental Security Income.
The average monthly benefit will rise by approximately $56, with the maximum earnings subject to Social Security tax increasing to $184,500.
This adjustment, known as the cost-of-living adjustment (COLA), was announced after a delay caused by a government shutdown.
Most Of The Increase For Seniors Allocated To Health Care Costs
Much of the increase for seniors will be allocated to health care costs, which are significantly higher for those enrolled in Medicare. In 2022, health spending accounted for 13.6% of total expenses, according to KFF, a health care research nonprofit.
The COLA varies based on individual benefit levels, and the net increase will depend on the rise in Medicare’s Part B premium, which covers outpatient care. The premium for 2026 is projected to increase by 11.6% to $206.50 per month, potentially consuming nearly half of the COLA for average beneficiaries.
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This adjustment comes amid financial challenges for many seniors, with 80% of Americans aged 60 and over lacking resources for financial shocks, according to a study by the National Council on Aging. The Social Security Administration will notify recipients of their new benefit amounts starting in early December.
Social Security Program's Challenges
The announcement of the COLA increase comes at a time when the Social Security program faces significant financial challenges. According to a report by the Committee for a Responsible Federal Budget, the Social Security retirement trust fund is projected to be depleted in seven years, with combined trust funds running out in nine years. Without corrective measures, retirees could face a 24% reduction in benefits by late 2032.
Warren Slams Trump Administration
Sen. Elizabeth Warren (D-Mass.) accused the Trump administration of planning to cut Social Security benefits for older Americans, urging the public to oppose these potential reductions.
She also criticized the administration for allegedly misrepresenting wait times for Social Security assistance.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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