Veterans and Retirees to Receive 2.8% Cost-of-Living Increase in 2026
The Social Security Administration has announced a 2.8% Cost of Living Adjustment (COLA) for 2026, affecting millions of veterans, military retirees, and Social Security beneficiaries. This increase, which takes effect in January 2026, is slightly higher than the 2.5% COLA for 2025. The announcement was delayed by nine days due to the recent government shutdown.
Details of the Increase
According to officials, approximately 71 million individuals currently receive Social Security benefits. On average, beneficiaries will see an increase of about $56 in their monthly payments. For instance, a military retiree receiving $2,500 in retired pay will experience a monthly increase of approximately $70, while a veteran receiving $1,500 per month will see an increase of about $42.
This COLA adjustment is particularly significant for veterans as it also applies to various benefits, including disability compensation, clothing allowances, and dependency and indemnity compensation. In 2024, Congress passed legislation linking veterans’ benefit increases directly to the rate of Social Security adjustments, ensuring that these benefits keep pace with inflation.
Inflation and Consumer Price Index
The COLA is calculated based on the Consumer Price Index (CPI), which monitors the prices of a broad range of goods and services to determine changes in the cost of living. The 2025 COLA of 2.5% marked the lowest increase since the onset of the COVID-19 pandemic. Previous COLA increases were 3.2% in 2023, 8.7% in 2022, and 5.9% in 2021, while the increase in 2020 was 1.6%.
Social Security officials are set to notify beneficiaries of their new benefit amounts via mail starting in early December 2025. This systematic adjustment aims to alleviate the financial strain on retirees and disabled veterans as they navigate the rising costs of living.
