Social Security Cost-of-Living Adjustment for 2026

Glenn Kirst is a planning excellence lead consultant at Northwestern Mutual.

Despite significantly lower rates than the peaks of 2022, inflation remains a top financial concern for many Americans. Fortunately for retirees, the Social Security Administration adjusts benefits yearly through its annual Cost-of-Living Adjustment (known as COLA) to help preserve the spending power of benefits. The administration announced recently that benefits checks will increase by 2.8 percent for 2026. Though this year’s adjustment is higher than last year’s 2.5 percent rise in line, it’s still in line with the average increase of 2.6 percent retirees have received over the past decade.

Here’s a look at how much retirees’ average monthly checks will go up in 2026—and other adjustments to the program.

What to expect if you’ve already claimed Social Security

Approximately 74.3 million people receive monthly benefit checks from the Social Security Administration, according to the latest government estimates. Of those, nearly 67.1 million are Social Security recipients; another 7.4 million receive Supplemental Security Income (SSI). About 2.5 million people receive both forms of payments.

The average retirement benefit in 2026 is expected to be $2,071, which is a $56 increase from 2025. Note that the maximum Social Security benefit for a worker retiring at full retirement age is increasing to $4,152 per month in 2026, up from $4,018 per month in 2025.

Changes if you’re still in the workforce

There’s also a change that affects those of us still in the workforce. When you’re in the workforce, you pay 6.2 percent in Social Security tax; your employer also kicks in 6.2 percent. Self-employed workers pay the full 12.4 percent. However, the taxes apply to only to a certain amount of income. For 2026, the maximum amount of pay that’s subject to Social Security tax will increase by 4.77 percent to $184,500, up from $176,100 for 2025.

Things to consider when claiming your Social Security

While you can start claiming Social Security benefits beginning at age 62, you must be at your full retirement age (FRA) in order to receive 100 percent of your benefit. Note that for every year that you delay receiving these funds after your FRA up to age 70, you’ll receive an 8 percent bump in your monthly benefit, which will remain in place for the rest of your life.

Of course, when to file for Social Security benefits isn’t solely a financial decision and varies for everyone. Whether it’s health issues or a late-career job loss, you may find yourself needing to retire before turning 67. Or perhaps you want to travel when you’re relatively young and healthy and expect your financial needs to be more modest in your later retirement years.

On the flip side, maybe you love your work and don’t have any plan to retire. Or if you already started receiving benefits but find that you can cover expenses by other means, you also have the option to suspend Social Security until age 70. These are all important considerations when it comes to deciding when to claim your Social Security benefit.

Social Security is just one part of a larger financial plan

Social Security is a critical base of income for retirees because it’s typically guaranteed and unaffected by swings in the market. But for most people, it’s just one part of a larger plan that’s designed to help you create reliable income while protecting against many known risks to retirement portfolios, including inflation. The guaranteed, stable payments from Social Security tend to pair well with other financial tools like investments, which can help to grow your wealth over time—but can be volatile in the short term.

Additional tools, such as income annuities and fixed income investments, working alongside Social Security reduce volatility in a financial plan and can help protect you from running out of money in retirement should you live longer than you expect. Additionally, whole life insurance can help protect your financial plan against volatility while preserving your legacy. Your cash value is essentially another cash reserve (that’s unaffected by market swings and likely to grow more than money sitting in a checking account) because you can access it at any time¹. In addition, the death benefit will allow you to be more deliberate about your legacy.

While the decision of how to use each of the above options may seem daunting, a Northwestern Mutual financial advisor can help you design a plan to get the most out of your assets during retirement. Just know that if you have a comprehensive retirement plan, you should feel confident that Social Security is just one of many threads that make up your retirement safety net.

¹ The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.