What the 2026 Social Security COLA means for your clients

Social Security benefits and supplemental security income (SSI) payments are set to rise 2.8% in 2026. On average, retired workers will receive about $56 more per month. The Social Security taxable wage base for old-age, survivors and disability insurance (OASDI) will increase from $176,100 in 2025 to $184,500 in 2026.

How COLA is determined

The Social Security Act ties the annual COLA to the consumer price index for urban wage earners and clerical workers (CPI-W). COLA ties benefits to inflation, so beneficiaries' purchasing power isn’t lost. It isn't a raise for work performed, so clients' net deposits may differ from the percentage increase (after Medicare premiums and any withholdings are applied).

Notices and timing

Beneficiaries typically start receiving 2026 benefit notices by mail in early December. Individuals who create a my Social Security account and choose online notices by Nov. 19, 2025, can see their personalized COLA notice in late November in the Message Center. Clients can set email or text alerts to avoid missing new messages.

Action checklist for preparers

• Notify clients: Send a brief email explaining what changed, when notices arrive and how to view them online.
• Capture the correct data: Update 2026 organizers to record gross benefit, Medicare deductions, and any federal or state withholding shown on the COLA notice.
• Rework projections: Once posted, refresh clients’ 2026 cash flow and estimated taxes using the new gross benefit and expected Medicare amounts.
• File the notice: Save the client's COLA notice with your records, consistently named, for example, "2026 COLA notice – Smith, John."
• Payroll settings: Set the OASDI wage base to $184,500 for payroll clients. Validate the 6.2% employee withholding, employer match and that high earners hit the cap at the right time.

Examples of the 2026 COLA change

Example 1: retired worker
2025 gross: $2,015 → 2026 gross with 2.8% COLA: $2,071 (about +$56). Suppose Medicare is $X, net ≈ $2,071 − $X − other deductions. Walk clients through the gross vs. net lines on their notice.

Example 2: survivor benefit with withholding
2025 gross: $1,600 → 2026 gross: $1,644.80. If $50 federal tax is withheld and the Medicare premium is $Y, the net ≈ $1,644.80 − $50 − $Y. Confirm withholding still fits 2026 cash-flow needs. (Note Medicare Part B premium amounts for 2026 are announced separately. The client’s COLA notice will reflect updated deductions once available.)

Client questions you can answer

When will I see the increase?
SSI increases start Dec. 31, 2025. Social Security benefit changes begin with payments for January 2026.

Why isn't my deposit exactly 2.8% higher?
The COLA applies to your gross benefit. Medicare premiums and other deductions affect the net deposit that hits your bank.

Do survivors and disability beneficiaries receive the COLA?
Yes. The 2.8% increase applies to retirement, survivors and disability benefits.

Can I see my notice early online?
Yes. If you select online notices in my Social Security by Nov. 19, 2025, you can view your personalized notice in late November. Paper notices arrive in December.

Where do I find Medicare premium amounts for 2026?
Medicare amounts are announced separately. Your COLA notice and online my Social Security Message Center will reflect the deductions once available.

Summary of the three key adjustments for 2026

• COLA: A 2.8% cost-of-living adjustment (COLA) applies to about 75 million beneficiaries.
• Start dates: SSI increases begin Dec. 31, 2025. Social Security payments reflect the new amounts in January 2026.
• Taxable maximum: The OASDI wage base rises from $176,100 to $184,500 for 2026.