The Social Security Administration has just announced a 2.8% cost-of-living adjustment (COLA) for beneficiaries starting in 2026. That will raise the average benefits check from $2,008 per month to $2,064 — an increase of $56 per month, or just under $675 per year.
Intended to counter the rising cost of goods and services, this year’s COLA is slightly higher than the 2.5% adjustment in 2025. But the additional funds won’t make a huge difference for most retirees, says Stephanie Ford, senior vice president and financial advisor at Wealth Enhancement Group.
“It doesn’t necessarily improve their financial situation,” Ford told CNBC Select. “It’s more of an offset, especially when you consider that health care and housing costs are rising faster than the COLA itself.”
Those health care costs are especially concerning: In 2026, Medicare Part B premiums are projected to jump by nearly 12%.
“That alone could absorb most, if not all, of the COLA increase for many retirees,” Ford said. “So while it’s helpful, it’s not likely to make a meaningful difference in their overall budgeting.”
If you’re looking to retire in the next few years, these figures can be discouraging – especially considering that the average U.S. life expectancy is now 78.39 years.
Experts like Ford say the key is to use Social Security as a supplement, not a replacement for a paycheck. Here are some key strategies to help you fund your post-work years.
1. Max out your retirement accounts
No matter how far you are from collecting Social Security, there’s one definite way to strengthen that foundation: Maximize contributions to your tax-advantaged retirement accounts.
2. Get guaranteed income
Some annuities offer additional benefits, such as paying double if you need long-term care. And, as with Social Security payments, some annuities incorporate cost-of-living adjustments to offset inflation.
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3. Make your savings work harder
Open a high-yield savings account or CD. You’re not going to get rich putting all your money in a high-yield savings account or a CD, but you’re not going to lose any of it, either. If you’re at or near retirement age, that’s the main objective – to avoid the stress of a market downturn. With some five-year CDs paying up to 4.15%, you can lock in a rate now before additional Fed cuts inevitably reduce their earning potential.
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Bonds can be relatively safe bets. Bonds offer regular interest payments and have historically offered lower risks than the stock market. Pay close attention to ratings, though. Bonds with AAA ratings indicate a very low default risk, but bonds with subpar ratings (BBB or lower) carry a higher risk.
Update your portfolio. The closer you get to retirement, the more you’ll need to update your investments to adopt a lower-risk profile. While that does not mean abandoning the market entirely, it does require a heightened focus on dividend-paying stocks and conservative funds.
“If you’re within five years of retirement, your priority should shift toward preserving capital,” Ford said. “That means reducing your exposure to equities and increasing your allocation to low-risk investments like bonds, CDs and Treasuries.”
If you’re more in the range of 15 years away, she added, “you still have time on your side.”
4. Consider your most valuable asset
As you prepare to hang up your working clothes, it’s important to think about where you’ll hang your hat. If you’re a homeowner, you’ve probably accumulated a sizable chunk of equity – particularly after the surge in housing prices over the past five years.
Can you downsize? Consider your long-term plans for where (and how) you want to live. That two-story house requires a lot of upkeep. Moving into a smaller condo would minimize maintenance while giving you access to cash. According to Clever Real Estate, 68% of Baby Boomers say they’d expect to make at least $100,000 in profit if they put their homes on the market.
Should you tap your home equity? Rather than selling your house, you could turn your equity into cash. Homeowners 62 or older can consider a reverse mortgage. The upside is that you’ll have additional funds to live on, but you could be leaving your heirs with a financial mess to clean up.
You can borrow against the equity accrued in your home with a reverse mortgage
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5. Keep working
In most cases, the longer you avoid collecting Social Security, the more you stand to gain. While the full retirement age for anyone born after 1960 is 67 years old, if you wait until you’re 70, you’ll qualify for 124% of your total retirement benefit. (That higher amount will include any future COLAs, as well.)
If you want (or need) to keep working, waiting until at least full retirement age to collect has its benefits. The earliest you can collect Social Security is 62, but in 2025, the income cap is $23,400 a year. After that, you’ll sacrifice $1 of your benefit check for every $2 you earn above the maximum.
Once you hit full retirement age, though, you can earn any amount and still receive your full Social Security benefits.
When will you see the COLA in your Social Security check?
Social Security checks should reflect the COLA starting in January 2026. Beneficiaries receive checks based on their date of birth:
- If you were born between the first and the 10th of the month, you should see the increase in the check arriving on Jan. 14, 2026.
- If you were born between the 11th and 20th of the month, expect it on Jan. 21, 2026.
- If you were born between January 21st and the end of the month, the first bigger check should arrive on Jan. 28, 2026.
Some recipients will receive the increase sooner, however.
- If you’ve received Social Security benefits since before May 1997, your first check of the year should arrive on Jan. 3, 2026.
- If you receive Supplemental Security Income (SSI), those benefits are typically paid on the first of the month. Since New Year’s Day is a federal holiday, checks will be distributed on Dec. 31, 2025.
The full calendar of Social Security payment dates is available online.
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Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.