The United States Social Security Administration announced a cost-of-living adjustment of 2.8% for 2026, up from 2.5% this year, reflecting continued inflationary trends. In addition, the maximum amount of earnings subject to social security tax is to be increased.
What is a cost of living adjustment?
A cost-of-living adjustment (COLA) is an annual increase in Social Security and Supplemental Security income to ensure that these benefits are in line with inflation.
From key dates to the scope of Social Security taxes, all frequently asked questions (FAQs) are answered here —
Frequently asked questions
Q 1 – When will the beneficiaries receive the modified beneficiaries?
A 2.8% cost-of-living adjustment will take effect for benefits paid to nearly 71 million Social Security recipients in January 2026. Increased payments to nearly 7.5 million Supplemental Security (SSI) recipients will begin on December 31, 2025. In particular, some individuals receive both Social Security and SSI benefits.
Q 2- What is the maximum amount that will be subject to Social Security tax?
The maximum amount of earnings subject to Social Security tax (the taxable maximum) will increase to $184,500 from $176,100.
Q 3- What is the earnings limit for workers under full retirement age?
The earnings limit for workers under full retirement age has increased to $24,480. The SSA deducts $1 from benefits for every $2 earned above $24,480.
Read also | Social Security Coke: Benefits for US retirees to rise 2.8% in 2026.
Q 4- What is the earnings limit for workers at retirement age?
The earnings limit for people reaching full retirement age in 2026 has been raised to $65,160. The SSA reduces benefits by $1 for every $3 earned above $65,160 until the worker reaches full retirement age.
Q5- What is the threshold for workers after reaching full retirement age?
For workers who are of full retirement age or older, there is no cap on earnings throughout the year.
Q 6- How much will the monthly pension benefits increase?
On average, Social Security retirement benefits will increase by about $56 per month starting in January.
Read also | Social Security 2026 COLA Announcement Plan Out; Here’s what we know
Q7 – When will recipients be notified?
Social securityyou will begin sending notices of new benefit amounts in early December 2025. As last year, recipients will receive a simple, one-page COLA notice that uses clear, personalized language and lists the exact dates and dollar amounts of their updated benefits and any deductions.
Q 8- Where to check the SSA notice?
Individuals with My Social Security Accounts can securely access their COLA notices online, which the SSA says is faster and more convenient than receiving them by mail. Account holders also have the option to set up SMS or email alerts for new messages, including their COLA notifications.
Q9 – How to receive notifications online?
To receive COLA notices online, individuals must create or log in to their personal My Social Security account and opt out of receiving paper notices by November 19, 2025. To create an account, go to www.ssa.gov/myaccount. Having an online My Social Security account allows individuals to apply for a replacement Social Security card, check the status of their application and benefits.
Q 10– How is COLA calculated?
The Social Security Act sets out how the COLA is calculated. The Social Security Act ties the annual COLA to increases in the Consumer Price Index for Urban Wage and Clerical Workers (CPI-W), as determined by the Department of Labor’s Bureau of Labor Statistics.
Meaning of COLA
“Social Security is a promise kept, and the annual cost-of-living adjustment is one way we work to ensure that benefits reflect today’s economic realities and continue to provide a foundation of security,” said Social Security Administration Commissioner Frank J. Bisignano. “Cost-of-living adjustments are an important part of how Social Security accomplishes its mission.”
