Social Security COLA: How the Annual Raise Works

1How much did benefits go up?

Benefits payable from December 2025, paid from January 2026, rose 2.8 percent. The federal SSI payment rose by the same percentage, to $994 a month for an individual and $1,491 for a couple. Recent years show how much the figure moves with inflation:

Retirement, spousal, survivor and disability beneficiaries all receive it. Social Security sends a notice with your new amount, usually in December, and it also appears in your online account.

2How is the COLA decided?

By a formula fixed in law, not by a vote each year. Social Security takes the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, the CPI-W, for July, August and September, and compares it with the same three months of the last year a COLA was paid. The rise, rounded to the nearest tenth of a percent, becomes the COLA.

The CPI-W tracks the prices paid by households that earn most of their income from wages, which is why some retirees feel it understates their own costs; that debate comes up again below.

Because the measuring period ends in September, the figure is announced in October, soon after September's prices are published. Until then, any number for the coming year is a forecast. If prices do not rise, there is no COLA, but benefits do not go down.

3Why didn't my deposit rise by 2.8 percent?

For most people, the answer is Medicare. The Part B premium is usually taken out of Social Security, and in 2026 it rose by $17.90, from $185 to $202.90. Consider a hypothetical retiree whose benefit was $1,900 a month. The COLA adds $53.20, and since benefits are rounded down to the dollar, the new benefit is $1,953. After the higher premium, the deposit rises by about $35, not $53. Tax withheld as a percentage of the benefit rises with it, trimming the gain slightly more.

A hold-harmless rule protects most people whose premium is deducted from their benefit: their Part B increase cannot exceed their COLA in dollars, so the net payment does not fall. It does not protect people who pay their premium directly, people new to Medicare, or those paying higher income-related premiums, whose premium increase can take a larger share of the raise. If a Medicare Savings Program pays your premium, you keep the whole COLA; see Medicare Savings Programs.

4Do I have to do anything to get it?

No. The COLA is automatic. Every fall, though, scammers use the announcement as bait, with calls and texts saying your raise must be activated or confirmed, sometimes for a fee. Social Security never asks you to activate a COLA, never threatens to stop benefits if you do not call back, and never asks for gift cards or cryptocurrency. Hang up or delete the message; our guide to spotting benefit scams explains how to report it. The one thing worth doing is keeping your address current with Social Security, so the notice of your new amount reaches you.

5What if I haven't claimed yet?

You still benefit. From the year you turn 62, every COLA is added to your primary insurance amount, whether or not you have started collecting. Someone who waits until 67 or 70 to claim receives a benefit that already includes the adjustments made in the meantime. Our guide to how much Social Security you will get explains how the base amount is figured.

6Will the raise affect my other benefits?

It can, a little. Programs that count Social Security as income see the raise too. For SNAP, the higher benefit is counted when your state updates your case, which can trim the SNAP amount slightly. Because SNAP subtracts 30 percent of net income, a $50 raise usually lowers the SNAP benefit by about $15 or less, so the household still comes out ahead. In public housing and with Section 8 vouchers, your rent share is 30 percent of adjusted income, so a $50 raise can lift rent by about $15 at your next review. Report the new amount when an agency asks, or an overpayment can follow later.

There are protections. People who lost SSI because of a COLA but would still qualify without the COLAs received since can often keep Medicaid under a federal rule, and many programs for people with low incomes raise their own limits each year. If a COLA pushes you just over a limit, ask the agency whether a disregard applies.

7Can the COLA raise my taxes?

Over time, it can. Part of your Social Security becomes taxable once your combined income passes $25,000 for a single filer or $32,000 for a married couple filing jointly, and those thresholds have never been adjusted for inflation. Each COLA raises your benefit, and half of it counts toward combined income, so year by year more retirees cross a line without anything else in their lives changing. Our guide to whether Social Security is taxable explains the test and the ways to plan around it.

8Do state SSI supplements rise too?

Not automatically. The federal SSI payment rises with the COLA, but a state supplement is set by the state, which may raise it, freeze it or change it on its own schedule. A recipient's total can therefore rise by a little less than the federal percentage. Your state's human services agency can tell you what it pays this year.

9What moves with the COLA, and what doesn't?

The SSI payment moves with it, and through it many SSI-linked limits. Other figures follow national average wages instead: the taxable maximum, $184,500 in 2026, the earnings test limits and the earnings needed for a work credit. By law those wage-indexed figures rise only in a year when there is a COLA. Medicare premiums are set separately each fall. Other federal payments use similar adjustments: VA disability compensation has been raised each year by the same percentage, and federal civilian and military retirement pay are adjusted under their own rules.

10What does the COLA mean over a long retirement?

More than any single year suggests. Raises compound: a $2,000 benefit that grows an average of 2.5 percent a year would be about $3,277 after 20 years. That is one reason delaying a claim, which raises the base every COLA is applied to, pays off for people who live a long time, and why a surviving spouse who inherits the larger benefit inherits its future COLAs too.

The next adjustment, for 2027, will be announced in October 2026 and paid from January 2027, and Medicare announces its 2027 premiums later in the fall. Waiting for both before setting next year's budget avoids a surprise in the first deposit of the year.

There is a limit to the protection. The COLA is measured on the spending of working households, not retirees, whose costs lean more on health care and housing, and Medicare premiums have often risen faster than benefits. Treat it as protection against general inflation, not a promise that every cost is covered.

11About the next one

Only Social Security's October announcement sets the next COLA; any earlier figure is a forecast. A COLA is a percentage of your own benefit, so your dollar change will differ from the examples here, and premiums and withholding also change what you receive.