Social Security benefits will rise 2.8% in 2026, providing an average increase of about $56 per month for retired workers, according to the Social Security Administration. The cost-of-living adjustment (COLA) announced in October 2025 will boost payments for nearly 71 million Social Security beneficiaries and 7.5 million Supplemental Security Income (SSI) recipients starting in January 2026.
The 2.8% increase represents a modest uptick from the 2.5% COLA that took effect in 2025. For the average retired worker, the monthly benefit will rise from $2,015 to $2,071, according to the SSA. The COLA is calculated annually based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and reflects inflation trends in the third quarter of the year.
The increase comes as Social Security faces long-term funding challenges. The program’s trust fund is projected to become depleted in 2032 if Congress does not act, according to recent reports. When that occurs, the SSA would only be able to pay about 80% of scheduled benefits without legislative changes. Lawmakers have proposed various reform options, including adjusting the payroll tax cap and modifying benefit formulas.
Fairness Act Payments Continue Rolling Out
Alongside the annual COLA increase, the Social Security Fairness Act is delivering significant retroactive payments to workers previously affected by two federal provisions that reduced their benefits. As of July 7, 2025, the SSA had completed sending more than 3.1 million payments totaling $17 billion to eligible beneficiaries, according to the agency’s official website.
The Fairness Act, signed into law on January 5, 2025, repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)—rules that had reduced or eliminated benefits for over 2.8 million people who received pensions from work not covered by Social Security, including many teachers, firefighters, police officers, and federal employees. The repeal became effective January 2024, making the payments retroactive to that date.
Eligible beneficiaries receive a one-time lump-sum payment covering the increase in benefits from January 2024 through the month before their adjustment became active. The amount varies significantly depending on the type of benefit received and the size of the person’s non-covered pension, with some recipients eligible for increases exceeding $1,000 per month going forward. The SSA began adjusting monthly benefit payments in February 2025 and most affected beneficiaries started receiving their new monthly amounts in April 2025.
The agency completed processing the retroactive payments five months ahead of schedule, according to a July announcement. As of mid-July 2025, the SSA had also received 289,715 new applications from people who had never previously applied for benefits because they were discouraged by WEP or GPO reductions. The agency reported it had completed 92% of those new applications.
Sources
- Social Security Administration — 2.8% COLA announcement, average benefit increase of $56 per month, 71 million beneficiaries affected
- Social Security Administration — Fairness Act payment milestone: 3.1 million payments, $17 billion distributed as of July 7, 2025
- Social Security Administration — WEP and GPO repeal effective January 2024, retroactive payment structure
- CNBC — Fairness Act implementation details and timeline
- Chase Bank — 2026 Social Security changes overview
