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The federal government has officially announced a 2.8% cost-of-living adjustment (COLA) for 2026, impacting approximately 75 million Americans in response to rising inflation.

Getting into it: According to the Social Security Administration (SSA), benefits for retirees, disabled individuals, and recipients of Supplemental Security Income (SSI) will rise by an average of about $56 for retired workers. This adjustment will bring the average benefit for retirees up from $2,015 to $2,071 starting in January 2026. Couples receiving benefits will see their combined monthly payments increase from $3,120 to $3,208, while SSI recipients will receive their first adjusted payments on December 31, 2025.

The COLA is based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which showed a 3% year-over-year rise in prices as of September, driven partly by higher costs for food, energy, and medical services.

The SSA explained that the purpose of the annual COLA is to help Social Security payments keep pace with inflation and preserve purchasing power for the program’s roughly 75 million beneficiaries. In a statement, SSA Commissioner Frank Bisignano said, “Social Security is a promise kept, and the annual cost-of-living adjustment is one way we are working to make sure benefits reflect today’s economic realities and continue to provide a foundation of security.”

While the 2.8% increase is slightly higher than last year’s 2.5% adjustment, it remains below the long-term average and comes amid widespread concerns about rising costs in essential categories. Many advocacy groups argue that the COLA still falls short of what’s needed, especially for seniors and disabled Americans living on fixed incomes. For example, overall food prices are up 3.1% from a year ago, with beef prices surging nearly 15%. Energy prices have also climbed substantially, with electricity up by 5.1%.