More than 75 million Americans receiving Social Security and Supplemental Security Income (SSI) benefits will see their monthly payments rise by 2.8% in 2026, marking the first time in three years that the annual adjustment has outpaced the previous year’s increase.
The Social Security Administration (SSA) announced the cost-of-living adjustment (COLA) on Friday, shortly after the Bureau of Labor Statistics (BLS) released the delayed September Consumer Price Index (CPI) report. The report had been postponed by over a week due to the ongoing federal government shutdown.
The SSA bases its annual benefit increase on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure that tracks inflation for working households.
The index rose 2.9% in September, averaging 2.7% over the July–September period, the key months used to determine the COLA.
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The 2.8% increase will take effect in January 2026 for about 71 million Social Security beneficiaries, while 7.5 million SSI recipients will begin receiving the higher payments on December 31, 2025. Some individuals qualify for both programmes.
This marks the first time since 2023 that retirees will see a higher increase than the year before. In 2023, benefits jumped by 8.7% the largest since 1981, following a 5.9% increase in 2022. For 2025, the adjustment stood at 2.5%.
Inflation, which spiked to a 40-year high as the U.S. economy emerged from the COVID-19 pandemic, eased through 2023 and 2024, slowing benefit growth. However, the BLS reported that inflation edged up again in 2025, with the broader CPI climbing 3.0% in September, compared to 2.9% in August.
To ensure the timely release of the September inflation report, the Trump administration recalled some furloughed BLS employees earlier this month, prioritizing the data needed to calculate Social Security adjustments.
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Most other economic reports remain suspended amid the ongoing government shutdown.
The COLA adjustment aims to preserve the purchasing power of retirees and beneficiaries against rising living costs, ensuring their benefits continue to reflect inflationary trends in the broader economy.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
