With rampant inflation plaguing the US economy, people are looking to the sky for a cost-of-living adjustment as if it will solve all their problems. And although symbolic, this adjustment seems to substantially help those on fixed incomes, such as pensioners. That small difference can be what helps you pay the bills and keep the pantry stocked.
Traditionally, the cost-of-living adjustment is usually announced in October. However, with the federal government shutdown, we had to wait until November to find out what the 2026 adjustment would be.
2026 COLA
Predictions made by organizations such as The Senior Citizens League put it at 2.7%. And they weren’t far off: it ended up being officially 2.8%. This percentage increase in pensions is the same across the country, but that doesn’t mean that all pensioners will receive the same increase. Obviously, those receiving larger checks will see a greater increase.
Social Security sets the cost-of-living adjustment each year based on third-quarter inflation. To do this, they look at the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July to September. If this index rises, benefits increase by the same percentage. That is why the COLA for 2025 was 2.5 percent, since the IPC-W increased by that same amount in the third quarter of 2024.
But the COLA for 2026 has already been published and will take effect in January 2026. This means that all pensions sent to cover expenses in January of next year will already have the 2026 COLA integrated. The percentage itself is national, but what you see in your bank deposit depends on the steps Social Security takes to calculate payments, including how it handles rounding and Medicare deductions.
A miniscule boost in pension benefits
Predictions made by organizations such as The Senior Citizens League put it at 2.7%. And they weren’t far off: it ended up being officially 2.8%. This percentage increase in pensions is the same across the country, but that doesn’t mean that all pensioners will receive the same increase. Obviously, those receiving larger checks will see a greater increase.
Social Security sets the cost-of-living adjustment each year based on third-quarter inflation. To do this, they look at the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July to September. If this index rises, benefits increase by the same percentage. That is why the COLA for 2025 was 2.5 percent, since the IPC-W increased by that same amount in the third quarter of 2024.
But the COLA for 2026 has already been published and will take effect in January 2026. This means that all pensions sent to cover expenses in January of next year will already have the 2026 COLA integrated. The percentage itself is national, but what you see in your bank deposit depends on the steps Social Security takes to calculate payments, including how it handles rounding and Medicare deductions.
Which states will see the biggest increase in pensions in 2026?
The question is a bit of a trick: statistically, pensions are higher in some states. However, this figure is linked to the higher incomes that workers have had for decades. They have been able to contribute more and for longer to Social Security over the years, so it is obvious that they will receive a higher pension when they retire.
Although we have discussed this more casually in this article, areas with a high standard of living and higher wages tend to have retirees with higher pensions. This is why there is a list of states whose retired workers—that is, people who have worked in that state for many years—receive a higher average retirement pension.
This is the case in New Jersey, Connecticut, and Delaware, where we see that they have an average of $150 more in pension benefits than other states such as Minnesota, Massachusetts, and Indiana.
FAQs
How much will be the COLA for 2026?
It will officially be 2.8%.
When will I see the COLA change?
On your January 2026 benefits.
Why do some states get higher raises in their benefits?
The checks were higher to begin with—workers in those states had higher salaries, and contributed a higher total to their future pension—so they have higher benefits.