Yesterday, the 2026 Social Security COLA increase was announced. If you don’t know what COLA means, it is defined as Cost-of-Living Adjustment. It has nothing to do with soda. Congress implemented COLAs in 1975 to offset the high inflation numbers during the 1970’s.

So, what exactly is that and how does it affect you? It is the percentage that social security recipients will see as an increase starting next year. If you’re not on social security right now, you may think it doesn’t affect you but you’d be incorrect. Each COLA increases your initial benefit. Hubby got a statement from social security about ten years ago. It showed he’d get a specific benefit at age 70, let’s say $1,900/mo. However, when he actually retired at age 69, he received a higher amount than he would have originally received because of COLA increases. The amount he received was over $2,100/mo. The COLAs boosted his income $200/mo. at an earlier age.

So how are COLAs determined? COLAs are calculated by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter of each year. That means they used figures from July, August and September of every year for computations. In mid-October, Social Security always releases the number they will use for next year’s COLA. This year, that number is 2.8%. That means retirees will get a 2.8% boost in their Social Security checks. For example, if you’re currently getting $2,000/mo. gross in your social security check, you’ll get an extra $56 (before taxes) each month. While that sounds great, it really isn’t.

For example: Medicare will increase from $185/mo. to $206.50. That’s an increase of $21.50/mo. just for Medicare. That doesn’t include the cost of food, medicine, insurances, etc.

Moral of the story:

There have been years where there hasn’t been an increase, but those are few and far between. While a 2.8% increase in one’s social security check sounds great, it really doesn’t really keep up with inflation. .