Seventy-one million Social Security beneficiaries will receive a 2.8% cost-of-living adjustment (COLA) starting in January 2026. This adjustment comes as the average annual increase over the past decade has been 3.1%.
The 2.8% COLA is intended to help beneficiaries keep pace with inflation, which has been a growing concern as Social Security Administration (SSA) spending has increased by 37% since 2019. Taxpayers are currently funding $1.5 trillion annually for Social Security, yet many seniors continue to face financial challenges. Critics argue that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) formula used to calculate adjustments does not adequately reflect the rising costs of essential expenses, particularly healthcare.
Additionally, the SSA"s budget has surged from $1.1 trillion to $1.5 trillion over the past five years. For more on the economic implications of rising prices, see recent developments in inflation trends.
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