2026’s COLA has had a better marketing campaign than Coca Cola’s “I’d Like to Teach the World to Sing”commercial back in 1971. We have been told that this teeny tiny 2.6% would change grandma’s struggles to pay up her medical bills, make grocery shopping a breeze, and even water our crops—despite not even owning a balcony where we can have a square foot urban garden. However, for millions of retirees living outside the Northeast corridor, the new payment schedule is nothing more than a reminder of the nation’s deep economic divide.
You may be wondering, doesn’t the federal government calculate everyone’s raise with the same 2.8% math? Unfortunately, yes. But because the formula multiplies based on past earnings, it exacerbates the gap between the wealthy and the working class. Do you know why? Because the system rewards historical income, not current need.
Who would have thought that HCOL areas would have higher SS checks? Shocker, right? But if you needed a kick up your boot to feel some motivation and grind… think about the benefits you might want to perceive when you are a couple decades older and your bones don’t feel up to hustling to receive a full-time salary anymore. Here we are going to explain how come 5 specific states do have higher Social Security benefits for retired people—and no, they are not showing favoritism.
Decades-long salary gap as the root of pension disparity
The COLA was created with the purpose of adjusting for inflation, but the base benefit has nothing to do with that. By law, the Social Security Administration calculates your benefit based on your highest 35 years of indexed earnings. If you had a modest salary for most of your working life—well, it will show off when time comes to receive your pension.
Will this is not morally wrong or right—you simple receive a percentage of what you contributed throughout your working life—this formula inherently favors regions that have historically offered high salaries, regardless of the current economic reality.
For example, a worker in Connecticut or New Jersey who perceived higher wages throughout the 1990s and 2000s compared to the national average and better salary than a worker in the South. Fast forward to 2026, this history is paying dividends. While the national average struggles to keep up, these specific states are projecting average monthly payments above $2,200… simply because their residents earned more money decades ago. Moving for work does seem to pay off after all.
A wider gap due to difference in wages
By applying a percentage increase to an already inflated base, the problem is not theoretical, but translates into a compounding advantage for specific zip codes. According to the latest SSA data projections, Connecticut, New Jersey, and New Hampshire are set to lead the nation, with Delaware and Maryland close behind.
To put it simply, a 2.8% raise on a massive check is a lot more money than a 2.8% raise on a modest one. While a retiree in a lower-income state fights for an extra $40 to cover groceries, retirees in these five states are seeing their checks swell by significantly larger margins. This has serious consequences in real life. It effectively creates a two-tier Social Security system: the “High-Wage Five” who receive premium benefits, and the rest of the country looking on from a distance.
Cost of Living (and how your bigger pension can disappear into thin air either way!)
The only good thing about all this—for those looking on with envy—is that this high payment is largely a mirage. These states may receive the highest checks, but they also host the most aggressive drain on retiree income: the cost of living. The reason wages were high in Connecticut and New Jersey is that it costs a fortune to live there. [You could hypothetically work in New Jersey for decades and retire to Mississippi… but we highly doubt you would like to do so.]
If the government actually accounted for purchasing power parity, these $2,200 checks would look much smaller. Much of that “record-breaking” payment is immediately swallowed by some of the highest property taxes and housing costs in the nation. Furthermore, the influx of payments is partly due to the Social Security Fairness Act, which restored benefits to public servants—a demographic heavily concentrated in these states.
So before you look at your New Jersey cousins with envy because of their bigger Social Security checks, remember they won’t stretch much longer than yours! If you are a few years away from retiring, take this article as a wake up call to get your—excuse our French—shit together and start putting money away for your pension. Future you will be forever grateful!