Social Security Administration Agency officials said Friday that annual cost-of-living adjustments will increase by 2.8% through 2026, meaning the average monthly cost of living for retirees will increase by more than $56.
Benefit increases for nearly 71 million Social Security recipients will take effect in January. Nearly 7.5 million people will begin receiving Supplemental Security Income starting on December 31.
Friday’s announcement is Originally made last week but was postponed because federal government shutdown.
cost of living adjustmentThe COLA for retirees and disability beneficiaries is funded by payroll taxes levied on workers and their employers, up to a certain annual salary, which is expected to increase from $176,100 in 2025 to $184,500 in 2026.
Recipient has received The cost of living will increase by 2.5% in 2025 and Welfare increased by 3.2% In 2024, after experiencing a historic large-scale Welfare increased by 8.7% 2023, a record 40 years of high inflation.
The smaller increase in 2026 reflects slower inflation. The agency will notify beneficiaries of the new benefit amounts by mail in early December.
Some seniors say the increase is not enough
Some seniors say cost-of-living adjustments have done little to help their ability to pay daily expenses. “It’s inconsistent with the affordability crisis we’re facing right now,” said Linda Deas, an 80-year-old resident of Florence, South Carolina.
Deas is a retired information systems network operations specialist who moved from New York to South Carolina in 2022 to be closer to family. She said her monthly rent has increased by $400 over the past two years.
She listed other items that have become more expensive for her in the past two years, including car insurance and food. “If you’ve been to the supermarket recently, you’ll notice that prices are going up, not down,” she said.
Deese isn’t the only one who thinks costs are spiraling out of control. An AARP poll shows that older Americans are increasingly struggling to keep up with today’s economy. The poll shows that only 22% of Americans over 50 believe that Social Security recipients only need about 3% more Coke to keep up with rising prices, while 77% disagree. AARP said that sentiment is consistent across party lines.
In Deese’s case, the MIT Living Wage Calculator estimates that an adult living alone in Florence, South Carolina, would spend $10,184 per year on housing, $3,053 on medical expenses, and $3,839 on food.
Myechia Minter-Jordan, CEO of AARP, said Coke is “a lifeline to independence and dignity for tens of millions of older Americans,” but even though every year A boost to inflation measuresIn terms of income, “seniors continue to face challenges with basic expenses.”
Social Security Administration Administrator Frank Bisignano said in a statement Friday that the annual cost-of-living adjustment “is one way we work to ensure benefits reflect today’s economic realities and continue to provide a foundation of security.”
Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center, said in a statement that the cost-of-living increase “will not address all of the financial challenges families face or all of the program’s shortcomings.”
The agency has been in turmoil in recent months
The latest COLA announcement comes as the Social Security Administration has endured nearly a year of turmoil, including Thousands of workers laid off as part of the Trump administration’s efforts to shrink the federal workforce. Trump administration officials also issued statements but later retracted them, raising concerns about the future of the program.
Treasury Secretary Scott Bessent said in July that the Republican administration was committed to protecting Social Security, hours after he said in an interview that the new Children’s Savings Plan signed into law by President Donald Trump “is a backdoor to privatizing Social Security.”
In September, Bisignano had to walk back remarks that the agency was considering raising the retirement age to shore up Social Security. “The government is not currently considering raising the retirement age,” Bisignano said in an emailed statement to The Associated Press at the time.
“I think everything is on the table and will be considered,” Bisignano said in a statement when asked whether raising the retirement age would be possible to maintain the solvency of the senior plan.
Efforts to improve the welfare of the elderly
Additionally, the Social Security Administration faces a looming bankruptcy date if Congress does not address this issue. A June 2025 Social Security and Medicare trustees report noted that the Social Security trust fund, which covers elderly and disabled beneficiaries, will be unable to pay full benefits starting in 2034. At that point, Social Security will be able to pay only 81% of benefits.
Social Security benefits were last reformed about 40 years ago, when the federal government raised the program’s eligibility age from 65 to 67.
While a permanent solution to shore up benefit programs has yet to be passed into law, both the Trump and Biden administrations recently signed new benefit laws for retirees that are expected to add to their financial well-being.
Trump administration, as Republican tax and spending billprovides tax relief to many seniors through temporary tax relief for those 65 and older, which applies to all income, not just Social Security. However, those unable to claim the deduction include the lowest-income seniors who already pay no Social Security taxes, those who choose to receive benefits before age 65, and those above the required income threshold.
Additionally, former President Joe Biden will be in office in 2024 repeal two federal policies — Windfall elimination provisions and government pension offsets — previously capped Social Security payouts for about 2.8 million people, mostly former public employees.
These measures hastened the demise of elderly welfare programs.
“Long-standing questions about the adequacy of benefits for low-income seniors should prompt policymakers to urgently work on broader reforms rather than ignore Social Security’s long-term solvency,” said the Bipartisan Policy Center’s Sprick.