Is the 2.8% Social Security COLA Increase Enough? Depends on Who You Ask

You can buy a couple dozen cans of Coca-Cola with that.

The Social Security Administration announced a 2.8% cost-of-living adjustment for 2026. For more than 70 million recipients, that means an extra $56 per payment, bringing the average monthly benefit to just over $2,000. Does that sound fair? It depends on who you ask. “Retirees will always tell you it’s never enough, economists will often say it’s too much, and many suggest using other forms of measurement rather than the consumer price index,” said Mary Beth Franklin, president of RetirePro.

While most advisors encourage clients to wait until age 70 to claim the largest benefits possible, not everyone listens. “There are fears about the long-term financial stability of Social Security, and that could be playing into it,” Franklin told Advisor Upside.

Crack Open a Can

COLA increases are meant to preserve retirees’ buying power and account for inflation, which stood at 3% as of September, lower than expected but still above the Federal Reserve’s 2% goal. This year’s 2.5% COLA was the smallest in four years, and many Americans feel the 2026 bump barely offsets rising prices for essentials like utilities and certain groceries:

• Less than a quarter of Americans aged 50 and older agree that a 3% COLA increase is enough to account for surging costs, according to a recent AARP poll. Most said it should be between 5% and 8%.
• The COLA is based on the CPI for Urban Wage Earners and Clerical Workers, or CPI-W, which focuses on the spending habits of working households as opposed to the broad population of urban consumers represented by the CPI-U. 
• Groups like the Senior Citizens League have pushed to use the CPI for the elderly, or CPI-E, which better reflects healthcare costs and senior spending habits.

Running on Empty? Social Security isn’t the sole source of retirement income for most Americans, but it remains vital, even for those with high incomes from IRAs, 401(k)s, and pensions. “The benefits are extremely valuable because it’s the one form of guaranteed retirement income that includes a cost-of-living adjustment,” Franklin said. “Even traditional pensions, unless you work for the federal or some state governments, don’t tend to have inflation adjustments.”

However, the system itself faces challenges. More people are retiring and living longer, while birth rates are falling and fewer workers are contributing. The program isn’t going broke, but its funds likely won’t cover 100% of benefits by 2033, and recipients would instead receive about 80%.

Younger generations have taken note as only 5% of Gen Z and 16% of millennials with 401(k)s expect Social Security to be their main retirement income, according to Cerulli data. Adding to the frustration is the current government shutdown. Payments continue, but it’s harder to schedule appointments at Social Security offices. “It worries people and continues to undermine their faith in the Social Security system,” Franklin said.