Social Security's 2026 COLA: Retirees in 10 States Will Get the Largest Raises Next Year

Social Security benefits are an important source of income for most retired workers, so the annual cost-of-living adjustment (COLA) is always a highly anticipated event. Next week, the Social Security Administration will announce the upcoming 2026 COLA on Oct. 15, provided the federal government shutdown has ended.

The latest forecast from The Senior Citizens League, a nonpartisan senior advocacy group, says benefits will increase 2.7% next year. But while all retirees will see their Social Security payments adjusted by the same percentage, pay increases as measured in dollars will vary widely. Read on to learn the 10 states in which retirees will get the largest COLAs in 2026.

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Social Security's COLAs are based on how consumer prices change in the third quarter

Social Security's annual cost-of-living adjustments (COLAs) are determined based on how the Consumer Price Index (CPI) changes during the third quarter, the three-month period from July to September. For example, the relevant CPI metric increased 2.5% in the third quarter in 2024, so Social Security beneficiaries received a 2.5% pay raise in 2025.

That percent increase is added to the benefit paid to reach retired worker, inclusive of any Medicare premiums and tax withholdings that are automatically deducted. The number is then rounded down to the next-lowest dime. For example, a retired worker who received $1,750 per month in 2024 would receive $1,793.70 in 2025.

Importantly, that means retired workers with bigger benefits also receive bigger COLAs (as measured in dollars). Consequently, retired workers living in the 10 states with the highest median Social Security benefits will, in aggregate, receive the largest COLAs next year, no matter what the actual cost-of-living increase turns out to be.

The 10 states with the highest median Social Security benefits for retired workers

The Social Security Administration publishes an Annual Statistical Supplement, a detailed report that includes program descriptions and population data. The chart below pulls information from the 2025 report, which includes data through December 2024. It shows the 10 states with the highest median Social Security benefits for retired workers.

Data source: Social Security Administration. Dollar amounts reflect benefits paid in December 2024.

While state of residence does not directly impact how much income retirees receive from Social Security, there is an indirect connection. Benefits are determined using a formula that considers lifetime earnings and claim age, so retirees in states with higher incomes typically receive larger Social Security benefits.

Indeed, Census Bureau data shows five states listed above -- New Jersey, Connecticut, New Hampshire, Maryland, and Massachusetts -- rank among the 10 states with the highest median income. Additionally, three other states listed above -- Delaware, Washington, and Minnesota -- have median incomes above the national median.

Michigan and Indiana do not fit the pattern. While they rank among the 10 states with the highest median Social Security benefits, they also have relatively low median incomes. One possible explanation is people who worked in other states (with higher wages) often choose to retire in Michigan or Indiana. Alternatively, retirees in those states may claim Social Security at older ages (which results in a larger benefit) versus other states.

Interestingly, the opposite happens in California and Washington, D.C. They simultaneously rank among the 10 geographies with the lowest median Social Security benefits and the highest median incomes. The likely explanation is that many people move away from those areas when they retire due to the relatively high cost of living.

Here's the bottom line: State of residence indirectly influences Social Security benefits because benefits are tied to lifetime earnings. So, people in states with higher median incomes tend to receive larger Social Security payments. But merely moving to a different state will have no impact on your benefit, though it could impact whether you owe state income tax on benefits.

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