Social Security may feel like a background issue until you’re close to claiming it, but changes to annual benefit increases can have a real impact on retirement income, especially for people who expect Social Security to play a meaningful role in their monthly budget. With the recent cost-of-living adjustment (COLA) in 2026, now is a smart time to understand what’s changing and how those adjustments actually work behind the scenes.
In a recent article, Suze Orman broke down what the 2026 Social Security increase means, and highlighted an often-overlooked detail: These annual adjustments apply even if you haven’t started collecting benefits yet.
Understanding how the 2026 COLA works, and what to do now to prepare, can help you make more informed decisions about claiming strategies, retirement income planning and how much flexibility you’ll have in the years ahead.
Each year, Social Security benefits receive an inflation-based increase known as the COLA. For 2026, that increase has been set at 2.8%. It’s definitely a modest boost that reflects inflation as measured in the year-to-year period used by the Social Security Administration (which differs from more recent general inflation measures).
This adjustment helps preserve purchasing power as prices rise, but the boost may still feel small for retirees facing rising costs in essentials like housing and healthcare.
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One key point Orman emphasized is you get this annual increase even before you begin taking benefits. Once you have reached age 62, you can start to claim Social Security. Your future benefit automatically rises with each year’s COLA, whether or not you’ve filed for benefits.
Orman has long advised against claiming Social Security right when you turn 62. Why? Because waiting increases your monthly benefit:
Your benefit grows each year you wait, up to age 70.
If your full retirement age (FRA) is 67 (for most people born in 1960 or later), claiming at that age yields a benefit about 30% higher than claiming at 62.
Because Social Security applies the COLA to your benefit even while you delay, waiting not only increases your base benefit, but also boosts the COLA applied to that larger amount.
Even small changes to Social Security benefits can have an outsized effect over time, especially when paired with decisions about when and how to claim. Preparing ahead gives you more control, more flexibility and fewer surprises when benefits change. Taking a proactive approach now can help you better align Social Security with the rest of your retirement income strategy and long-term financial goals.
Even with a 2.8% increase, benefit boosts might not fully match rising costs. Planning ahead by estimating your income and expenses can give you a clearer picture of any gaps you’ll need to fill.
Delaying Social Security can be one of the most impactful decisions you make in retirement planning. If you can rely on other income sources (like savings or a pension), waiting to file until age 67 or even 70 can significantly increase your guaranteed lifetime income.
Relying solely on Social Security isn’t enough for most retirees. Consider building other income streams — retirement accounts (IRAs, 401(k)s), annuities or part-time work — to provide flexibility and stability. This can be especially important given ongoing concerns about future benefit adjustments.
If you haven’t already, set up a retirement planning meeting with a financial advisor. They can help you analyze expected Social Security income, projected retirement expenses, and whether delaying benefits makes sense for your situation.
The 2026 Social Security COLA of 2.8% reflects ongoing efforts to offset inflation in benefits. While the increase isn’t dramatic, understanding how these adjustments work and how timing your filing affects your lifetime income is critical to retirement planning. With a clear strategy and forward-looking preparation, you can make decisions that help maximize your long-term financial security.
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This article originally appeared on GOBankingRates.com: Suze Orman Flags 2026 Social Security Update Many Retirees Overlook
