SSA Announces 2.8% COLA for 2026 — What you need to do now

The Social Security Administration today confirmed a 2.8% cost-of-living adjustment (COLA) for 2026. The increase affects roughly 75 million Americans—including nearly 71 million Social Security beneficiaries and about 7.5 million Supplemental Security Income (SSI) recipients (some people receive both). On average, retirees will see roughly $56 more per month beginning in January 2026. The SSA also announced the taxable wage base will increase to $184,500 (up from $176,100). SSA will begin mailing individualized COLA notices in early December; people with a my Social Security account can view notices online and must opt out of paper by November 19, 2025 to receive the notice electronically.

Below is a practical explainer for advisors and agents on what this means, how COLA interacts with Medicare/IRMAA and taxes, and a prioritized list of client actions and ready-to-use templates you can copy/paste.

Quick take — the headlines (what clients will want to know)

• COLA: 2.8% for 2026; average retiree benefit ≈ +$56/month (starting January 2026).

• SSI: increased payments for SSI recipients start Dec 31, 2025.

• Taxable maximum: Social Security taxable wage base rising to $184,500 for 2026.

• Notices: SSA mailings begin in December; online my Social Security messages available earlier for account holders (opt-out deadline Nov 19).

• Context: The last decade’s average COLA has been about 3.1%; 2025’s COLA was 2.5%, and the long-term average since the 1970s is higher (historical average ≈ 3.75%).

Why this matters to your clients — three practical implications

1) It’s real money—but modest

A $56 monthly bump (≈$672/year) won’t solve income shortfalls for many retirees, but it is meaningful—especially for households where Social Security is a primary income source. For clients near poverty or with tight budgets, the COLA can cover essentials (utilities, prescriptions). For higher-net-worth clients it’s less material but still worth modeling.

2) COLA can be partially or fully offset by Medicare/IRMAA changes

Higher Social Security benefits (and other income events) can affect IRMAA (Medicare Part B and D income-related surcharges). Even a nominal COLA can interact with income thresholds or cause small changes to net benefit after Medicare premiums. Likewise, Medicare Part B/D premium announcements will come via the SSA message center (late November) and may blunt the net purchasing power of the COLA.

3) Payroll & tax planning effects for working clients

The taxable wage base jump to $184,500 affects high-earners and employers — more earnings will be subject to Social Security payroll tax in 2026. This matters for projections of FICA exposure and for clients whose take-home pay and cashflow planning depend on payroll withholding.

Priority checklist — what advisors should do this week

1. Re-run income projections: Update each client’s 2026 Social Security income with 2.8%. Show both monthly and annual changes and highlight the net effect after estimated Medicare premium and potential IRMAA exposure.

2. Identify IRMAA-vulnerable clients: Flag clients whose 2024 MAGI falls near IRMAA thresholds and who had large 2025 taxable events (Roth conversions, 401(k)/IRA distributions, capital gains, pensions). Run IRMAA sensitivity scenarios.

3. Confirm my Social Security status for clients: Encourage beneficiaries to create/sign into my Social Security and opt in for online notices before Nov 19, 2025 so they get the COLA notice faster. Offer a short help session for clients who need account setup assistance.

4. Model net COLA after Medicare premiums: Once CMS/SSA publish Part B and Part D premiums, update net-income models; show clients their gross COLA vs. net purchasing power.

5. Discuss lump sums and one-time payments: If clients expect one-time retro payments or other taxable events, quantify how those events could change IRMAA and Medicare surcharges.

6. Update payroll and withholding guidance for working clients: For clients approaching the taxable maximum, advise on payroll withholding and cashflow implications.

7. Schedule client communications: Send a short, plain-language bulletin to affected clients and offer a 15–20 minute review appointment. (See templates below.)

Example calculations (use in client meetings)

Average retiree: Current monthly benefit = $2,000 → 2.8% COLA = +$56 → New monthly = $2,056 → Annual increase ≈ $672.

Net example (illustrative):

• Gross COLA = +$56/mo

• Increase in Medicare Part B premium (example) = −$15/mo

• Change in IRMAA (if triggered) = −$35/mo

• Net change = +$6/mo → shows how premiums/surcharges can materially reduce the benefit of COLA for some clients. (Run real numbers per client.)

Client email template — immediate outreach (editable)

Subject: SSA announces 2.8% COLA for 2026 — we’ll review your benefits

Hi [Client Name],

The Social Security Administration announced a 2.8% COLA for 2026. For most retirees this means about $56 more per month starting in January (SSI increases begin Dec 31). We’ll update your benefit projection and check whether this changes your Medicare premiums or IRMAA exposure.

Would you like a quick 15-minute review next week to go over the updated numbers? Reply “REVIEW” or book directly here: [calendar link].

Best,
[Your Name]
NSSA Certified Social Security Advisor

Short client SMS / portal message

SSA announced a 2.8% COLA for 2026 (~$56/mo for average retiree). Reply “REVIEW” to schedule a 15-minute benefits check. — [Advisor name]

Suggested talking points for advisor calls

• “The COLA is 2.8% for 2026—good news, but modest vs. long-term averages. We’ll re-run your projection with this update.”

• “We’ll also check Medicare premiums and IRMAA — any large taxable events in 2025 could change your Medicare surcharges in 2026.”

• “If you don’t have a my Social Security account, we can help set one up so you get your official notice faster.”

IRMAA & Medicare: specific actions to protect clients

• Run IRMAA sensitivity scenarios for clients with 2024 MAGI near thresholds and those with recent/planned taxable events.

• Time distributions and Roth conversions where feasible — spreading taxable income across years may prevent crossing an IRMAA threshold. Consider QCDs (qualified charitable distributions) for clients who give charitably and are age-qualified.

• Coordinate with tax advisors before making large taxable moves this year — the combined tax + Medicare surcharge impact can be material.

Communication points on my Social Security and notices

• Encourage clients to create or log into my Social Security at www.ssa.gov/myaccount . Online account holders can view COLA notices sooner and set email/text alerts.

• Remind clients to opt out of paper notices by Nov 19, 2025 if they prefer digital delivery.

• SSA will mail simplified, personalized COLA notices in December with exact new benefit amounts and any deductions shown.

FAQs to share with clients

Q: When will I see the increase?
A: Most Social Security checks will reflect the new COLA in January 2026. SSI increases begin Dec 31, 2025.

Q: Will my Medicare premiums increase too?
A: Medicare Part B and D premiums are set separately; those notices will be posted in the SSA message center (late November). Part of your COLA can be absorbed by higher Medicare premiums or IRMAA surcharges.

Q: How big is the increase for me?
A: SSA will mail personalized COLA notices in December showing your exact new amount. If you have a my Social Security account, you can view your notice online sooner.

Compliance & disclosure note

Document all client interactions. If you recommend actions that could affect taxes or Medicare eligibility (e.g., Roth conversions, QCDs), tell clients to consult their tax professional. Disclose any commission or compensation considerations when recommending insurance or Medigap products.

A 2.8% COLA is constructive news—but it’s a prompt, not a panacea. For many clients the real question is how that modest increase fits into the full retirement picture: Medicare costs, IRMAA, taxes, portfolio withdrawals, and non-recurring payments. Advisors who act quickly—updating models, running IRMAA scenarios, and communicating clearly—will turn a routine announcement into a meaningful client touch that deepens trust and opens natural conversations about durability of income.