Key Points
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Social Security’s 2026 cost-of-living adjustment (COLA) will be announced in October, but the latest forecast suggests benefits will increase 2.7%.
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Whatever the percent increase, retired workers with larger baseline benefit payments will also receive larger COLAs (as measured in nominal dollars) next year.
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In aggregate, the retired workers in New Jersey will receive the largest COLAs in 2026 because the median Social Security benefit is highest in that state.
The Social Security program undergoes several changes each year, but none so important to retirees as the cost-of-living adjustment (COLA). Annual COLAs keep benefits aligned with inflation, which helps beneficiaries keep up with rising prices across the economy.
The Social Security Administration will announce the 2026 COLA on Oct. 15, shortly after the Labor Department publishes inflation data for September. The Senior Citizens League currently expects benefits to increase 2.7% next year, but the nonprofit group has raised its forecast for five consecutive months, so that figure is subject to change.
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Importantly, while all Social Security recipients will see their benefit payments adjusted by the exact same percentage, pay increases as measured in nominal dollars will vary widely. Read on to see the 10 states in which retired-worker beneficiaries will receive the largest COLAs in 2026.
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How Social Security’s COLAs are calculated
The Social Security Administration calculates annual cost-of-living adjustments based on the CPI-W, a subset of the Consumer Price Index. The average CPI-W reading from the third quarter (July to September) of the current year is divided by the same figure from the previous year. The percent increase becomes the COLA in the next year. For instance, the CPI-W increased 2.5% in the third quarter of 2024, so Social Security benefits increased 2.5% in 2025.
To turn the COLA into dollars, the percent increase is multiplied by the benefit paid to each retired worker, inclusive of any Medicare premiums that are automatically subtracted. The number is then rounded down to the nearest dime. For instance, a retired worker that received $1,500 per month in 2024 would have seen their benefit increase 2.5% to $1,537.50 per month in 2025.
Importantly, that means retired workers with larger Social Security benefits also receive larger COLAs as measured in nominal dollars. Accordingly, retired workers that live in the 10 states with the highest median Social Security benefits will receive the largest pay increases next year, regardless of what the official 2026 COLA turns out to be.
Retired workers in these 10 states will receive the largest COLAs in 2026
The following chart shows the 10 states with the highest median Social Security benefits for retired workers as of December 2024.
|
State |
Median Social Security Benefit |
|---|---|
|
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 |
Data source: Social Security Administration.
Importantly, state of residence has no direct impact on how much income retired workers receive from Social Security, but there is an indirect correlation. Benefits are calculated based on lifetime income and claim age, so it stands to reason that states with high median incomes are likely to have high median Social Security benefits, too.
Indeed, five states listed here — New Jersey, New Hampshire, Maryland, Washington, and Massachusetts — rank among the 10 states with the highest median income. And workers in three of the other states — Delaware, Connecticut, and Minnesota — have median incomes above the national median.
What about the other two states? Michigan and Indiana rank among the 10 states with the highest median Social Security payouts, but they have median incomes below the national median. That could mean more workers in those states claim Social Security at older ages, which results in a larger benefit, as compared to other states. It could also mean workers from other states choose to retire in Michigan and Indiana.
Here’s the bottom line: Social Security benefits are not directly linked to where a retired workers lives, so changing states will not magically make your benefit bigger. Instead, workers make more money in certain states, generally because the cost of living is higher, and those people are often awarded larger Social Security checks when they retire because benefits are based in part on lifetime income.
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