More than 75 million Americans receiving Social Security and Supplemental Security Income benefits will see their monthly payments rise 2.8% in 2026, accelerating from the prior year's increase for the first time in three years.
The Social Security Administration announced the annual cost-of-living adjustment to benefits on Friday, less than an hour after the Bureau of Labor Statistics published the Consumer Price Index for September, which had been delayed by more than a week by the ongoing federal government shutdown.
The agency bases the annual increase, closely watched by retirees and others on benefits, on the average of the annual increase in the CPI for Urban Wage Earners and Clerical Workers, also known as the CPI-W index. That index rose 2.9% in September and for the three months of July, August and September averaged about 2.7%.
The increase takes effect in January for 71 million Social Security recipients and on December 31, 2025 for nearly 7.5 million SSI beneficiaries. Some recipients receive both Social Security and SSI benefits.
It was the first time the annual increase was larger than the prior year since 2023, when recipients received an 8.7% increase - the largest since 1981 - after a 5.9% increase in the prior year.
For 2025, the increase was 2.5%.
Inflation, which surged to the highest level in four decades as the economy emerged from the COVID-19 pandemic, moderated over 2023 and 2024, resulting in a deceleration in benefits growth. Inflation, though, has edged up over the course of this year. The more widely watched main CPI index rose 3.0% in September, up from 2.9% in August, BLS said on Friday.
The Trump administration called back some furloughed BLS workers earlier this month to prepare the CPI report for September so that the Social Security increases could be announced. Publication of all other economic data releases by BLS and other statistical agencies has ceased during the shutdown.
