As inflation keeps eating into everyday expenses, Social Security’s annual cost-of-living adjustment (COLA) continues to play a vital role in helping retirees maintain their spending power. While the 2026 COLA percentage will apply to all beneficiaries equally, the actual increase in dollar terms won’t look the same for everyone. That’s because those with higher current benefits will naturally see larger dollar raises.
So, who’s set to benefit most, and what can you do now to prepare? Let’s break it down.
COLA
Every October, the Social Security Administration announces the next year’s COLA based on inflation data from the third quarter. Specifically, they use the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September. If prices go up, so do benefits.
The 2026 COLA is expected to be around 2.7 percent, according to forecasts from The Senior Citizens League. The official number is scheduled for release on October 15, 2025, assuming no federal government shutdown delays it.
This adjustment will be applied to January 2026 payments.
Formula
Your COLA increase is not added directly to your check. First, SSA applies the 2.7 percent to your primary insurance amount (PIA)—the base benefit calculated from your lifetime earnings. After that, the SSA:
- Truncates the new amount to the next lower dime
- Deducts Medicare Part B premiums (if applicable)
- Rounds the final result down to the nearest whole dollar
That means your actual raise might look a little different than a clean 2.7 percent boost. Also, if your Medicare premium rises in 2026, it could offset part of the increase.
States
Even though the COLA percentage is the same everywhere, the dollar impact is bigger in states where retirees already receive higher average benefits. That’s because 2.7 percent of $2,100 is more than 2.7 percent of $1,800.
Here are the 10 states positioned for the largest dollar increases based on median retired-worker benefits in December 2024:
| State | Median Benefit (Dec. 2024) |
|---|---|
| New Jersey | $2,172.00 |
| Connecticut | $2,159.00 |
| Delaware | $2,139.00 |
| New Hampshire | $2,121.00 |
| Maryland | $2,084.00 |
| Michigan | $2,067.00 |
| Washington | $2,061.00 |
| Minnesota | $2,053.00 |
| Massachusetts | $2,021.90 |
| Indiana | $2,016.00 |
These figures come from the Social Security Administration’s Annual Statistical Supplement 2025 and give a clear view of where the biggest dollar raises will occur, simply because the base checks are larger.
Geography
Does moving to another state increase your Social Security benefit? Not at all.
Social Security benefits are based on your lifetime earnings and the age you claim, not your current location. Your PIA is locked in regardless of whether you retire in New Jersey or Nevada.
However, higher benefit states often have higher incomes, which explains the correlation. Other factors like delayed claiming and migratory trends also affect state-level averages.
Planning
Even before SSA announces the official 2026 COLA, there are smart moves you can make right now to prepare:
- Estimate your increase. Multiply your current gross benefit by 0.027. Then remember that the actual result is reduced slightly by SSA’s rounding process and any Medicare premium changes.
- Review your earnings record. Log into your my Social Security account to make sure your lifetime earnings are recorded correctly, since this data directly impacts your PIA.
- Watch Medicare changes. If the Part B premium increases in 2026, it may absorb some of your COLA raise. This is a common source of surprise when net deposits fall short of expectations.
- Plan for taxes. Social Security benefits may be taxed at the federal level, and some states tax them too. Be sure you account for any withholding or estimated tax payments in your budget.
- Avoid chasing states. Moving won’t boost your benefit amount, though it might change your cost of living or state tax burden. Your payment follows you anywhere, but the math is already baked in.
Social Security’s 2026 COLA might not be massive, but even a 2.7 percent raise matters when every dollar counts. With higher-benefit states seeing larger dollar increases, and Medicare premiums still a factor, knowing the system helps you make smart financial plans heading into the new year.
FAQs
When is the 2026 COLA announced?
SSA will release the 2026 COLA on October 15, 2025.
How much is the expected COLA?
The 2026 COLA is forecasted at about 2.7 percent.
Which state has the highest median benefit?
New Jersey, with a median of $2,172 in December 2024.
Does moving change your SSA benefit?
No, benefits are based on earnings, not where you live.
Can Medicare reduce my COLA raise?
Yes, Part B premiums are deducted before final payment.
