Every year, millions of retirees and soon-to-be retirees keep an eye out for one critical number—the annual cost-of-living adjustment to Social Security. It affects how much they will receive each month and determines how well those payments will keep up with rising prices. In 2026, this adjustment will be 2.8 percent. This might not sound like a huge jump, but for people living on fixed incomes, every increase matters. Whether you are already collecting benefits or preparing to retire in the next few years, these numbers shape your financial future.

The 2026 Social Security COLA Projection is more than just a routine update. It reflects economic shifts, wage trends, and inflation patterns. Understanding this change helps people plan ahead, adjust their savings goals, and anticipate how their monthly income might grow. In this article, we will explain the full picture of the upcoming adjustment, break down what it means for those aged 62 to 80, and share what else is changing in the background of retirement planning.

2026 Social Security COLA Projection

The 2026 Social Security COLA Projection of a 2.8 percent increase may seem modest, but it plays a significant role in keeping benefits aligned with inflation. This projection is based on the most recent data released by the Social Security Administration and other government agencies. It is aimed at protecting the purchasing power of retirees, especially as essential costs like healthcare, housing, and food continue to climb. This increase also impacts Supplemental Security Income (SSI) payments, which are tied to the same cost-of-living adjustment. Whether you are 62 and just becoming eligible or 80 and well into retirement, this annual change helps ensure your benefits stretch a bit further.

Overview Table: Key Updates for 2026

Category	Details for 2026
Social Security COLA increase	2.8 percent
Ages affected by the COLA	62 through 80
Taxable wage base	Increased to 184,500 dollars
PBGC guaranteed benefit at age 65	Increased to 93,477 dollars
2025 guaranteed benefit comparison	89,181 dollars
Impact of updated mortality tables	Raised present values by about 5 percent
Change in lump sum segment interest rates	Lowered values for younger retirees
Present value shifts	Higher at older ages, lower at younger ages
Covered compensation status	IRS 2026 tables pending, Mercer projections used
SSI adjustments	Also increased by 2.8 percent

Social Security and Supplemental Security Income (SSI) Amounts

In October 2025, the Social Security Administration announced that benefits would rise by 2.8 percent in 2026. This adjustment is driven by the cost-of-living index and ensures that retirees do not fall behind due to inflation. The increase applies to both Social Security and SSI recipients, offering a slight cushion as everyday expenses rise.

This update is especially important for those aged 62 to 80, who may be more sensitive to changes in fixed income. While the boost may not completely cover inflation for all individuals, it still adds meaningful support. For someone receiving a monthly benefit of 1,800 dollars, this adjustment means about 50 dollars more per month, or 600 dollars annually.

PBGC Premiums, Guaranteed Benefits and Maximum Present Value

In addition to Social Security updates, the Pension Benefit Guaranty Corporation also released new numbers for 2026. Most premiums, including the per-participant variable-rate premium cap, are indexed to wage inflation and have increased accordingly. These changes affect employers and retirees involved in single-employer pension plans.

One of the most notable changes is the increase in the maximum guaranteed benefit for individuals retiring at age 65. In 2026, that benefit is rising to 93,477 dollars, compared to 89,181 dollars in 2025. This number is adjusted if retirement begins before or after age 65 or if benefits are paid in alternative formats like joint-life annuities.

The 2026 updates also include new present value tables that help pension plan administrators determine payout limits, especially for underfunded plans. These tables are essential when plans must calculate lump sum payouts and meet Internal Revenue Code Section 436 requirements.

Changes in Present Values for 2026 and 2025

One of the more technical but important updates relates to how the present value of pension benefits is calculated. For retirees aged 62 and older, present values have increased. This is mainly because of the higher maximum guaranteed benefit and the new mortality table used for 2026, which increased overall present value by about 5 percent.

However, for younger retirees and workers, present values have actually decreased. The reason lies in the change in lump sum segment interest rates. In August 2025, the rates dropped slightly for the first segment but climbed for others. This shift led to lower present value calculations at younger ages, making early retirement slightly less attractive in terms of lump sum distributions.

Projected Covered Compensation

Covered compensation is used by pension plans to calculate certain benefits and ensure compliance with federal rules on disparity. It is based on the average Old-Age, Survivors and Disability Insurance contribution and benefit base over a span of 35 years.

Although the Internal Revenue Service has not released its official 2026 covered compensation tables yet, Mercer has projected these amounts using the updated taxable wage base of 184,500 dollars. These projections are essential for employers maintaining qualified defined benefit plans and for participants who are nearing full retirement age. Once someone reaches that retirement age, their covered compensation becomes fixed, unaffected by future changes in wage bases.

FAQs About the 2026 Social Security COLA Projection