Social Security recipients get a nearly 3% cost-of-living bump

The Social Security Administration, or SSA, planned to adjust Social Security benefits for the rising cost of living and increase payouts by 2.8% in 2026 for 71 million Americans, according to a Friday statement. The bump will give the average retiree an extra $56 per month starting in January, according to the administration. The increase will apply to Social Security beneficiaries and those receiving supplemental security income.

How was the increase determined? Cost-of-living adjustments over the last decade averaged around 3%, with the most recent increase of 2.5% this year. It’s important for Social Security to reflect today’s economic reality so beneficiaries can stay secure, according to a statement from Social Security Administration Commissioner Frank J. Bisignano. In that vein, the administration also raised the maximum amount of earnings subject to Social Security tax to $184,500 from $176,100. The increase in average wages prompted the increased taxable amount, according to the administration.

The SSA’s policy change came out the same day as the Labor Department’s September inflation report, which showed an annual rate of inflation at 3%. Gas and energy saw the biggest increase during the month, with utility gas, energy, electricity, and used cars increasing the most over the last year.

Dig deeper: Read Carolina Lumetta’s report for more on the Trump administration’s ire over economic numbers.