Avaya Chapter of the NRLN
Social Security COLA
Will be 2.8% for 2026
The Social Security Administration (SSA) has made a significant announcement. On Friday, October 24, they revealed a 2.8% Cost-of-Living Adjustment (COLA) for 2026. This increase, though delayed due to the federal government shutdown, is a crucial update for all retirees.
While the COLA increase for January will add about $56 to an average monthly benefit of $2,071, it’s important to note that the standard Medicare Part B premium will also rise. This increase, expected to be $ 21.50, will require careful financial planning to ensure the full benefit of the COLA is realized.
Many seniors with Medicare Advantage plans are likely to learn their healthcare insurance provider is increasing deductibles, copays, and the maximum out-of-pocket cost. The drug deductible— the amount you pay up front before coverage kicks in—is growing for many Medicare Part D plans. Also, in several plans, medications that now have a flat copayment will next year require “coinsurance,” a percentage of the medication’s total cost.
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, was quoted in a Newsweek article that seniors have lost 20 percent of their purchasing power in Social Security payments since 2010, as COLA routinely lags actual inflation.
It’s worth noting that the current COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The NRLN is advocating for a change to the Consumer Price Index for the Elderly (CPI-E), which better reflects older Americans’ spending patterns, including high medical costs. This change could potentially provide seniors with a slightly larger COLA, offering hope for a more accurate and beneficial system.
The maximum amount of a worker’s earnings subject to Social Security tax will increase by 4.8%, from $ 176,100 in 2025 to $184,500, and the earnings threshold will remain at $7,200. This means that 6% more wage earners will now have to pay more than they did in 2025. The maximum is based on changes in the national average wage index, not CPI-W.
Vern Larson, President
Avaya Chapter of National Retiree Legislative Network
