The cost-of-living boost for Social Security beneficiaries will land at 2.8% in 2026, based on new data from a much anticipated but delayed September inflation report released Friday, Oct. 24.
The Social Security Administration confirmed the 2.8% figure via the social media platform X on Friday morning. On average, according to Social Security, retirement benefits will increase by about $56 a month starting in January.
Its nothing close to the dramatic 8.7% COLA jolt in 2023. But it is better than the increase that beneficiaries saw this year. In 2025, more than 72.5 million people saw a 2.5% COLA hike for their Social Security and Supplemental Security Income benefits.
Many retirees are struggling with higher costs, of course, particularly with medical coverage. Inflation isnt your friend when your income isnt growing by much in retirement — or if youre working, youre not seeing much in wage gains.
Hey there, fellow retirees and future Social Security recipients! I’ve got some exciting news that’ll put a smile on your face and maybe a little extra cash in your pocket next year The Social Security Administration just announced the 2023 cost-of-living adjustment (COLA), and it’s a BIG one!
The Big News: 8.7% Increase Coming in 2023
Let’s cut right to the chase – Social Security benefits will increase by a whopping 8.7% in 2023! This is one of the largest increases we’ve seen in decades, and it comes at a time when many Americans are feeling the pinch from rising prices.
What does this mean in real dollars? On average, Social Security benefits will increase by more than $140 per month starting in January 2023. That’s right – an extra $140+ in your pocket each month!
This increase will impact approximately 70 million Americans who receive Social Security benefits and Supplemental Security Income (SSI) payments That’s a lot of people getting a much-needed boost to their monthly income!
Why Such a Big Increase This Year?
You might be wondering why we’re seeing such a substantial increase for 2023. Well, it all comes down to inflation.
The Social Security Administration determines the annual COLA based on the Consumer Price Index (CPI-W), which is measured by the Department of Labor. When inflation goes up, the cost-of-living adjustment also increases.
With prices for goods and services rising significantly over the past year, this larger adjustment aims to help offset these higher costs for beneficiaries. It’s basically the government’s way of saying, “We see that everything costs more, so here’s some help keeping up.”
When Will You See the Increase?
The increase will take effect in January 2023. Here’s when you can expect to see the changes:
- SSI recipients: You’ll see the new payment amount beginning December 30, 2022
- Social Security beneficiaries: Your increased payments will start in January 2023
How to Find Out Your New Benefit Amount
The Social Security Administration will mail COLA notices throughout December to retirement, survivors, and disability beneficiaries, SSI recipients, and representative payees.
But if you’re the impatient type (like me!) and want to know your new benefit amount sooner, you’ve got options:
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Check online: You can securely access your Social Security COLA notice online using the Message Center in your personal my Social Security account in early December, before the mailed notices arrive.
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Create an account: If you don’t already have a my Social Security account, make sure you create one by November 15, 2022, to receive your 2023 COLA notice online.
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Set up alerts: Did you know you can get text or email alerts when there’s a new message waiting for you? That way, you’ll know right away when your COLA notice is available.
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Go paperless: If you prefer to access your COLA notice online only, you can opt out of receiving the mailed notice by changing your preferences in the Message Center of your my Social Security account.
Just remember, the 2023 benefit amounts won’t be available before December, so don’t try looking for them too early!
Other Changes Coming in 2023
The COLA isn’t the only change happening in 2023. January will also bring other adjustments based on increases in the national average wage index:
- The maximum amount of earnings subject to Social Security payroll tax will increase
- The retirement earnings test exempt amount will change
- Medicare premium changes (and there’s good news here!)
As Acting Commissioner Kilolo Kijakazi noted, “Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room.”
This is actually pretty significant, as it’s the first time in over a decade that Medicare premiums aren’t rising at the same time Social Security benefits are increasing!
What Recipients Are Saying
I’ve been looking at some comments from fellow Social Security recipients, and the reactions to the increase are mixed:
Some folks, like Sarah T., called it “a very good step” and “a big relief for old citizens.”
But others, like Sandra, pointed out a common issue: “We got a $140 a month increase and my landlord raised my rent $135. I should have known better than to think I would see any extra money.”
And Ricky B. expressed what many people are feeling: “Yes we need help and a increase in SS and SSI benefits sure would help… we need a raise we need help.”
These comments really highlight that while the 8.7% increase is substantial, many beneficiaries are still struggling to keep up with rising costs across the board.
Common Questions About the 2023 COLA
Let me address some questions you might have:
Will I get another raise later in 2023?
No, the COLA is an annual adjustment. The 8.7% increase is for 2023, and we won’t know about any potential increase for 2024 until October 2023.
Does the COLA apply to everyone on Social Security?
Yes, the 8.7% increase applies to all Social Security beneficiaries, including retirees, disabled workers, and survivors, as well as SSI recipients.
Do I need to do anything to get the increase?
Nope! The increase will be applied automatically – you don’t need to contact the Social Security Administration or fill out any forms.
Does this affect my future retirement estimate if I haven’t claimed yet?
Yes, the annual COLA does affect your online retirement estimates by adjusting them to account for inflation.
I’m turning 62 in 2023. Will I get the COLA if I decide to claim then?
Yes, if you become eligible for benefits in 2023, your initial benefit amount will already reflect the 8.7% COLA.
What to Do With Your Increase
An extra $140+ per month can make a meaningful difference in your budget. Here are some ideas for using your increased benefits wisely:
- Build an emergency fund if you don’t already have one
- Pay down high-interest debt
- Catch up on medical appointments you’ve been putting off
- Make home improvements that could save money long-term (like energy-efficient appliances)
- Treat yourself to something small – we all deserve little pleasures!
Looking Ahead
While the 8.7% increase is certainly welcome news, it’s important to remember that Social Security was never designed to be your only source of retirement income. Financial experts typically recommend having multiple sources of income in retirement.
If you’re still in the workforce, this is a good reminder to continue building your retirement savings through 401(k)s, IRAs, or other investment vehicles. Every little bit helps!
Final Thoughts
The 2023 Social Security COLA of 8.7% represents one of the largest increases in recent history. While it won’t solve all financial challenges for beneficiaries, it’s a significant adjustment that should help offset some of the rising costs we’re all experiencing.
I’d love to hear your thoughts on this increase. Will it make a difference in your monthly budget? Do you think it’s enough to keep up with your rising costs? Drop a comment below and let’s discuss!
Remember to check your my Social Security account in early December to see exactly how much your specific benefit will increase. And if you haven’t created an account yet, now’s the perfect time to do so!
Stay well, stay informed, and enjoy that extra $140+ per month coming your way in January!
Where is inflation overall?
The Consumer Price Index for All Urban Consumers increased 0.3% on a seasonally adjusted basis in September, after rising 0.4% percent in August, the U.S. Bureau of Labor Statistics reported Friday, Oct. 24.
Over the last 12 months, the all items index increased 3% before seasonal adjustment.
Inflation numbers came in less than expectations; some analysts even called inflation “surprisingly weak.”
Yet, make no mistake, many consumers are paying more than they imagined many times when they pull out their wallets — particularly at the pump in September.
Gas prices jumped by 4.1% month-over-month in September — the largest factor in the CPIs rise last month. Yet, gas prices were down 0.5% year-over-year.
New vehicle prices were up 0.8% year-over-year in September, while used car and truck prices were up 5.1% year-over-year.
Medical care services were up 3.9% year-over-year in September, based on the newly released data from the Bureau of Labor Statistics.
The COLA boost is good but is it good enough?
The COLA boost is slightly better than earlier estimates, even if were not talking about a lot of money.
The COLA was projected to be in the 2.6% to 2.9% range in 2026, according to earlier estimates. The Senior Citizens League, a nonpartisan advocacy group, had recently projected 2.7%.
A 2.8% COLA would add up to $56 a month — or $672 a year — for retirees receiving an average benefit of around $2,008 a month for retired workers.
The increase would be slightly less if you looked at the average for all beneficiaries. The average monthly payment, based on August figures, was $1,864.64 for all Social Security beneficiaries.
Many people dont believe an inflation-adjusted increase in Social Security benefits at or below 3% comes close to what they need to keep up with rising prices.
Only 22% of Americans age 50 and older agree that “a cost-of-living adjustment of right around 3% for Social Security recipients is enough to keep up with rising prices,” according to research conducted by the AARP in September 2025. Some 77% disagreed with that statement or felt the increase was not sufficient.
Most of those surveyed would want something in the 5% range or higher. Interviews were conducted between Sept. 18 and Sept. 23 among 1,001 U.S. adults age 50-plus in the Foresight 50+ Omnibus.
Funded and operated by NORC at the University of Chicago, Foresight 50+ is a probability-based panel designed to be representative of the U.S. household population ages 50 or older. Interviews were conducted online and via phone.