Nearly 74 million Americans depend on Social Security benefits, so changes to these payments are very important.
Every year, the Social Security Administration decides how much benefits will increase through something called the "cost of living adjustment," or COLA. This helps people plan and budget for the upcoming year.
What Is COLA and How Is It Determined?
The COLA increase is figured out based on inflation. Specifically, it looks at how much prices go up for everyday items, using data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between July and September.
Because the increase depends on things like inflation, current benefits, and how much someone earned during their life, the extra amount can be different for each person and also vary by state.
Which States Get the Biggest Social Security Raises?
Retirees living in certain states—especially those where people tend to earn more—get larger Social Security payments, which means their COLA increases will be bigger in real dollar amounts.
According to information from The Motley Fool and the Social Security Administration, here are the 10 states with the highest average monthly Social Security benefits for retired workers:
- New Jersey: $2,172
- Connecticut: $2,159
- Delaware: $2,139
- New Hampshire: $2,121
- Maryland: $2,084
- Michigan: $2,067
- Washington: $2,061
- Minnesota: $2,053
- Massachusetts: $2,021
- Indiana: $2,016
Social Security benefit amounts are based mostly on how much someone earned throughout their working years. So, states with higher incomes and cost of living tend to have higher average benefits.
What About the 2026 COLA Announcement?
The official COLA increase for 2026 was supposed to be announced on October 15. However, because of a government shutdown, that announcement may be delayed.
Even though the exact numbers aren’t out yet, experts have made predictions based on the formula the Social Security Administration uses.
A group called The Senior Citizens League believes the COLA for 2026 will be about 2.7%, slightly more than the 2.5% increase in 2025.
Historically, this would be the 29th highest COLA since adjustments started in 1977. A 2.7% increase would mean average retired workers would get about $54 more each month, raising the typical payment from $2,008 to $2,062.
Impact of the Government Shutdown
While the COLA is mostly predictable, the government shutdown creates some uncertainty. The Social Security Administration has a plan to keep about 90% of its workers on the job during the shutdown, but around 6,200 employees may be temporarily not working.
This could affect how quickly and effectively services are provided to Social Security recipients.
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Read next: What Experts Are Predicting About Social Security COLA 2026
