Social Security benefits to increase 2.8% in 2026

Cost of living adjustment for Social Security increases benefits for seniors based on inflation. It is typically calculated using the inflation rate for July, August, and September of the prior year. Over the past 25 years, it averages about 2.6 percent, and we just got this year's numbers. Here with more on the adjustment for 2026 is Yahoo Finance Senior Columnist Carrie Hannon. Carrie, the reason that we got the CPI report is so that this could be calculated. That's correct. They brought the workers back in to calculate these numbers, even though they weren't getting paychecks. Here's the point, Julie. They say they're going to bump it up starting January 1, 2.8 percent, the cost of living increase for Social Security beneficiaries. That is a hair above last year's, which was 2.5 percent. This is great news. Inflation is really important, and it hits retirees very hard in their bottom line. Adjusting this each year for inflation is important. That said, I've got to add that critics complain that this number really is not enough because it is based on the Consumer Price Index for urban wage earners. That's not retirees, and it doesn't account for what many people say are the things that retirees spend money on, like housing, which is up, health care, which is up, groceries, which is up. These are things that aren't calculated in this number in the same way, and so they feel that there's a bit of a disconnect. Now, this 2.8 percent, Julie, will, on average, Social Security administration said this will reflect in about $56 a month for the average beneficiary in an increase starting January 1st. Kerry, as you said, some of these items have gone up a lot, and they're weighted more heavily in some of this cohort's spending on a monthly basis. Has there been any talk of changing it, or this is kind of what it is? Right. No, the Senior Citizens League pushes back constantly. Most of, many experts I talk to have been pushing for them to find an index that's not so outdated to reflect what seniors actually are spending on. I mean, these are numbers that people are earning money, a younger worker, perhaps. So I think this is something that needs to be addressed in order for seniors not to ultimately fall behind. Yeah.