WASHINGTON, D.C.: Nearly 71 million Americans receiving Social Security benefits will see their payments rise by 2.8 percent in 2026, an increase that averages about US$56 more per month, the Social Security Administration said.

The cost-of-living adjustment (COLA) takes effect in January for retirees and disabled beneficiaries, while roughly 7.5 million Supplemental Security Income recipients will begin receiving higher payments on December 31.

The announcement, delayed by the recent government shutdown, reflects cooling inflation after several years of steep price increases. In comparison, benefits rose 2.5 percent in 2025 and 3.2 percent in 2024, following a record 8.7 percent jump in 2023, the highest in four decades.

The increase is funded through payroll taxes paid by workers and employers. The annual salary cap for those taxes will rise to $184,500 in 2026, up from $176,100 this year.

While the adjustment aims to preserve seniors' purchasing power, many say it still falls short.

"It does not match the affordability crisis we are having right now," said Linda Deas, an 80-year-old retiree from Florence, South Carolina. Deas, who moved from New York in 2022 to be closer to family, said her rent has climbed by $400 in two years, while food and insurance costs have also surged.

A recent AARP survey found that only 22 percent of Americans over 50 believe a 3 percent COLA is enough to keep pace with rising expenses, while 77 percent disagree. AARP CEO Myechia Minter-Jordan called the annual adjustment "a lifeline of independence and dignity," but said older adults still struggle to meet basic needs.

Social Security Commissioner Frank Bisignano said the increase "reflects today's economic realities and continues to provide a foundation of security." However, Emerson Sprick of the Bipartisan Policy Center cautioned that COLA increases "can't solve all the financial challenges households face or all the shortcomings of the program."

The agency's announcement comes as it faces internal upheaval. Thousands of employees have been laid off under President Donald Trump's efforts to shrink the federal workforce, and recent comments by officials about the program's future have fueled unease.

In July, Treasury Secretary Scott Bessent reaffirmed the administration's commitment to protecting Social Security after earlier remarks suggesting a new children's savings plan could act as "a back door for privatizing" the program. In September, Bisignano also walked back comments about possibly raising the retirement age, saying it was "not under consideration."

Meanwhile, Social Security's long-term finances remain precarious. The latest trustees' report projects that the program's trust funds will run short in 2034, after which benefits would drop to about 81 percent of their current level unless Congress acts. The last major reform came in the 1980s, when the retirement age was gradually raised from 65 to 67.

Both the Trump and Biden administrations have enacted measures affecting retirees. Trump's tax and spending package included a temporary tax deduction for seniors aged 65 and above, though it excludes low-income retirees who already pay no taxes on benefits.

In 2024, President Joe Biden repealed two federal rules, the Windfall Elimination Provision and Government Pension Offset, that limited benefits for about 2.8 million former public workers. While expanding payouts, those repeals have added pressure to the program's solvency.

"Questions about whether benefits are adequate for low-income seniors should inspire urgency among policymakers," said Sprick. "Ignoring Social Security's long-term solvency isn't an option."