The Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, translating to an average monthly increase of over $56 for retirees. While set to benefit nearly 71 million recipients starting January, many seniors and advocacy groups argue the increase is insufficient to cover rising daily expenses amidst an 'affordability crisis,' reflecting moderating inflation but ongoing financial struggles.
The Social Security Administration has announced a 2.8% cost-of-living adjustment (COLA) for 2026, which will provide an average monthly increase of over $56 for retirees. This adjustment, effective January for Social Security recipients and December 31 for Supplemental Security Income beneficiaries, will impact nearly 71 million people. The COLA is financed by payroll taxes, with the annual salary cap for these taxes increasing to $184,500 in 2026. This year's increase is smaller than previous years (e.g., 8.7% in 2023) due to moderating inflation. However, many seniors express dissatisfaction, stating the increase is inadequate to combat the 'affordability crisis' they face. For instance, 80-year-old Linda Deas highlighted significant increases in rent, auto insurance, and food prices. An AARP poll supports this sentiment, with 77% of Americans over 50 disagreeing that a ~3% COLA is sufficient to keep up with rising costs. While SSA Commissioner Frank Bisignano stated the COLA reflects economic realities, AARP CEO Myechia Minter-Jordan acknowledged that older adults still struggle with basic expenses. This announcement comes amidst a period of turmoil for the agency, including workforce reductions and retracted statements by officials regarding potential privatization or raising the retirement age. Furthermore, the Social Security trust funds are projected to be unable to pay full benefits starting in 2034, only covering 81% if Congress does not intervene. Recent efforts to boost benefits, such as a temporary tax deduction under the Trump administration and the repeal of certain policies by the Biden administration (Windfall Elimination Provision and Government Pension Offset), have also accelerated the program's insolvency. Experts like Emerson Sprick from the Bipartisan Policy Center emphasize the urgent need for broader reforms to address both benefit adequacy for low-income seniors and the program's long-term solvency.
