A Modest Social Security Bump—and a Bigger Planning Conversation
Social Security is getting another cost-of-living raise—about 2.7 % for 2026.
It’s a small increase, but it’s also a good reminder to look at how Social Security fits into your overall retirement plan. The conversation around benefit adjustments and the system’s long-term solvency is heating up again, so now’s a good time to separate facts from fear and make sure your plan stays flexible.
What’s changed
The cost-of-living adjustment (COLA) for Social Security benefits is about 2.7 %–2.8 % for 2026.
A retiree receiving US $2,000 per month will see an extra US $50–US $60 monthly before taxes.
No changes yet to benefit formulas or retirement-age rules under current legislation.
Why this matters
Modest COLAs help offset inflation, but most retirees still see costs rise faster than benefits.
If you’re close to claiming, review how timing affects your lifetime income.
Understand how Social Security interacts with other income—pensions, withdrawals, and investment earnings—to manage taxes and cash flow.
The small rise is a good prompt to revisit your budget and inflation assumptions.
Solvency & long-term planning
The concerns:
Social Security’s trust funds could be depleted around 2033–2034, according to current SSA projections.
Payroll taxes would still fund roughly 75 – 80 % of scheduled benefits.
Without reform, gradual benefit reductions or higher taxes may be required.
The context:
“Running out” doesn’t mean checks stop—it means the system would have to rely only on ongoing payroll tax revenue.
Lawmakers have strong incentives to protect benefits, so fixes are expected, though timing is uncertain.
The right takeaway is not panic—but preparation. Build flexibility into your plan and maintain multiple income streams.
Key planning actions
Verify your benefit amount through your SSA account and confirm deposits.
Review tax exposure—especially if you draw income from IRAs, pensions, or investments.
Revisit claiming age decisions to see how deferring could improve long-term income security.
Stress-test your retirement plan for different inflation and benefit-reduction scenarios.
Stay informed—policy changes may come gradually, and small tweaks can affect your overall plan.
Related: How the “Big Beautiful Bill” Reshapes Your Tax Plan
Final thoughts
Social Security remains a foundation of retirement income, but it shouldn’t be the only pillar. The 2.7 % increase is helpful, yet small. Use it as a cue to re-evaluate your income strategy, confirm your numbers, and make sure your plan can adapt—regardless of what happens in Washington.
Related: Year-End Tax Planning Checklist
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About the author: Finn Price, CPFA, CEPA, is a business owner and wealth manager at Railroad Investment Group. He helps successful entrepreneurs & individuals with concentrated stock positions in their 30s, 40s and 50s build, organize, protect and transfer their wealth.
Note: this article is general guidance and education, not advice. Consult your money person or your attorney for financial, tax, and legal advice specific to your situation.
Securities and advisory services offered through LPL Financial, a registered investment Advisor, Member FINRA/SIPC.
