Last October 2025, the percentage corresponding to the increase in the Cost of Living Adjustment (COLA) to be applied for 2026 was announced. The figure came out to 2.8%, which will be applied from the first payments of 2026. However, recipients of Supplemental Security Income (SSI) from the Social Security Administration (SSA) will be the first to receive this increase and will not even have to wait until 2026. On December 31, 2025, they will receive the payment corresponding to January, which is issued early due to coinciding with a national holiday. Other beneficiaries of benefits such as retirement, survivor, and disability insurance will have to wait for the regular Social Security schedule dates.
Cost of Living Adjustment (COLA)
The Cost of Living Adjustment (COLA) refers to the annual adjustment made by the Social Security Administration (SSA) with the aim of maintaining the purchasing power of beneficiaries’ benefits against inflation. The calculation is obtained by comparing the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) of the third quarter of the previous year with that of the current year. This increase in beneficiaries’ amounts will affect more than 71 million Social Security (SSA) beneficiaries. With the increase in COLA, the maximum taxable amounts must also be taken into account, that is, the maximum amount of earnings subject to Social Security taxes.
- The maximum taxable amount will increase to $184,500.
- The earnings limit for workers who are younger than full retirement age will increase to $24,480.
- The earnings limit for individuals who reach full retirement age in 2026 will increase to $65,160.
When will the COLA start being paid?
The new COLA increase will begin with the January 2026 payments. However, not all Social Security beneficiaries will receive it at the same time. The first beneficiaries to see an increase in their monthly benefit will be Supplemental Security Income (SSI) recipients. This is due to the payment schedule of the Social Security Administration. These beneficiaries receive their benefit on the first day of each month, but since January 1, 2026, falls on a national holiday, the payment is moved to the previous business day, which is December 31, 2025. As the Social Security Administration points out, “The increase in payments to nearly 7.5 million SSI beneficiaries will begin on December 31, 2025”.
When will the rest of the beneficiaries receive it?
The rest of the beneficiaries will have to wait for the normal cycle of the official Social Security Administration calendar. Beneficiaries of retirement, survivor, and disability insurance will receive their payments as usual according to their birth date on Wednesdays each month.
- Born 1-10: second Wednesday of the month.
- Born 11-20: third Wednesday of the month.
- Born after the 20th: fourth Wednesday of the month.
Therefore, until the payments corresponding to January 2026 are completed, all Social Security beneficiaries will not have received the COLA increase. One of COLA’s goals is to ensure that beneficiaries can cover the costs of essential items such as housing, groceries, and medical care. However, the moderate increase in COLA does not seem to be sufficient to keep up with the rising Medicare prices by 2026, which is becoming a real problem for the affected beneficiaries.