A HUGE $40.70 bump is set to come to Social Security recipients due to one key reason.
New estimates have shown that the cost-of-living adjustment to Social Security checks next year will be higher than previously thought.
Monthly inflation data has revealed that in 2026, Social Security beneficiaries could receive a 2.5% bump in their checks.
While this is the same increase seen this year, it has increased from the 2.4% estimate from last month, according to Mary Johnson, an independent Social Security and Medicare policy analyst.
She said: “This estimate may rise with four more months of data still to come in before the 2026 COLA will be announced in October.”
The average monthly Social Security check in May reached a record high of $1,948.17.
Based on this, a 2.5% rise would see recipients get roughly $40.70 more monthly.
This average is decided by COLA data, an annual adjustment to ensure recipients are not paid too little in comparison to the current inflation rate at that time.
It is based on the percentage increase in the consumer price index for Urban Wage Earners and Clerical Workers from July through September of the last year.
COLA is based on the same three months of the current year to work out how much Social Security beneficiaries need to be paid to keep them from being dwarfed by inflated prices.
The COLA data for the upcoming year is normally announced in the October, but this year could be different.
This is because of the unprecedented pressure facing the Social Security Administration (SSA).
The tariff policies of Donald Trump have also raised questions as to how the COLA rate will be effected by October.
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said: “Another month goes by with little evidence of tariffs, but the longer-term inflation challenge they pose remains.”
BIG CHANGES
The SSA could undergo large reforms due to Republican spending proposals.
The US Sun reported that the government wants to raise the retirement age to 69 by 2033.
WHEN SOCIAL SECURITY PAYMENTS ARE MADE
Social Security payments are issued on the second, third, or fourth Wednesday of each month based on the recipient's birthdate:
- Second Wednesday: For individuals born between the 1st and 10th of the month
- Third Wednesday: For those born between the 11th and 20th
- Fourth Wednesday: For those born between the 21st and 31st
This change would see Americans forced to work for longer for ultimately less benefit.
It stands to impact roughly 257 million, and see them lose up to $420,000 in lifetime benefits, or an annual loss of $3,500.
Currently, the full retirement age is 66 for those born between 1943 and 1954, and 67 for those born from 1960 onward.
The new proposal would push this to 69 for individuals born in the 1970s or later.
On top of this, the SSA is facing great financial challenges with deep cuts seemingly inevitable in the next few years.
The number of those claiming Social Security has reached a record high of nearly 4 million, and the SSA’s budget is wearing thin.
It has been projected that a massive 20% cut may be needed by 2035 to account for the SSA’s dwindling funds.
The SSA has also faced a huge employee cut recently, with the President shaving off 7,000 workers to 50,000.
This is down from the SSA’s 63,000 employees a decade ago in 2015.
