Here's Exactly What the 2026 Social Security COLA Could Mean to the Average Retiree

Key Points

• The average retiree will get a roughly $54 increase in their Social Security benefit.

• Seniors who pay Medicare premiums from their benefits will get a smaller effective increase.

• The result is an effective $33 increase for the average retiree who is enrolled in Medicare.

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We'll know the 2026 Social Security cost-of-living adjustment, or COLA, for sure in mid-October, but we already have a good idea of what it is going to be. After all, the COLA is based on third-quarter inflation data, and we've already seen the inflation numbers from two out of the three months that make up the third quarter.

Based on this information and the expected inflation data for September, the 2026 Social Security COLA is expected to be 2.7%. This means that all Social Security beneficiaries will get a 2.7% raise, starting with the payment received in January 2026.

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With this in mind, let's take a look at what this would mean for the average retiree in the United States.

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The average Social Security retirement benefit

Social Security sends the average retired worker a monthly payment of about $2,008, or $24,096 per year. The overall average Social Security benefit is a bit lower, but includes other types of recipients such as spouses and children of retired workers, survivors, and workers with disabilities.

How the 2026 Social Security COLA would change the average

Applying a 2.7% increase to the average Social Security retirement benefit of $2,008.31 per month shows a new average benefit of $2,062.53 starting in January. This is an increase of $54.22 per month, or about $651 per year.

Of course, this is just the average, and many Social Security retired workers get significantly more or less. So, just to provide a few other examples, here's how a 2.7% COLA would impact several other benefit levels:

• If you get $1,000 per month from Social Security, the COLA would increase your payment to $1,027.
• If you get $1,400 per month from Social Security, the COLA would increase your payment to $1,437.80.
• If you get $2,500 per month from Social Security, the COLA would increase your payment to $2,567.50.
• If you get $3,000 per month from Social Security, the COLA would increase your payment to $3,081.

One big caveat

There's a reason I decided to list those examples -- to show that the COLA results in a different raise for different benefit levels. But there's another thing to keep in mind. Retirees who are 65 years old or older generally pay their Medicare Part B premiums directly from their Social Security benefits. And these are going up in 2026 for all retirees.

The standard Medicare Part B premium in 2025 is $185 per month. In 2026, it is expected to rise to $206.50. That's an increase of nearly 12%. High-income retirees pay more, but this is the general premium that applies to retirees.

Here's what this means. The average retired worker wouldn't see their monthly payment rise by $54.22 per month as stated in the calculation above. After accounting for the Medicare premium change, the actual increase would be $32.72. For other benefit levels, the effective COLA would decrease by $21.50.

If you aren't yet 65 years old and won't be turning 65 until after 2026, you don't need to worry about this. But it's important to know how Medicare Part B premiums can impact your effective COLA once you get there.

The bottom line

To sum it up, the expected 2.7% COLA isn't final, and could potentially change slightly in one direction or the other after September's CPI inflation data is revealed in mid-October. But assuming it proves to be accurate, the 2026 COLA would result in an increase of about $54 per month for the average retired worker, but the effective increase would only be around $33 for those retirees who pay Medicare premiums from their Social Security.

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