"For much of 2025, there was one big question on the minds of Social Security recipients: What would their 2026 cost-of-living adjustment (COLA) look like? In late October, seniors finally got their answer. The Social Security Administration announced that benefits would getting a 2.8% COLA in 2026. That 2.8% COLA, historically speaking, isn't Social Security's most generous. But it's also far from the smallest COLA to ever arrive."
"Social Security COLAs are based on inflation. When costs rise, Social Security benefits tend to follow suit. In 2025, President Trump made good on his promise to implement strict tariff policies. And since then, consumers have been grappling with higher costs. Higher costs are generally not a positive thing, but there can be a silver lining for retirees - a larger COLA. And lo and behold, 2026's COLA is coming in higher than 2025's. Tariffs were likely a big driver of that."
Social Security benefits will receive a 2.8% cost-of-living adjustment for 2026. That increase is larger than the 2.5% COLA in 2025 and larger than several past 0% COLAs. The COLA growth is tied to inflation, and tariff policies implemented in 2025 contributed to higher consumer costs that pushed the COLA upward. Medicare Part B standard monthly premiums are rising by $17.90, and those premiums are deducted directly from Social Security benefits. The premium increase will substantially reduce the effective boost seniors receive from the 2.8% COLA, limiting additional buying power.
Read at 24/7 Wall St.
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