Every year, the government announces changes to Social Security Insurance (SSI) and Social Security Disability Insurance (SSDI) payouts, to reflect changes in the economy. This Cost of Living Adjustment (COLA) typically leads to an increase in benefits. The same is true this year, as the government recently announced that benefits for both SSI and SSDI will be increasing by 2.8%, starting January 2026.
What does the 2026 Social Security COLA mean for you? Will it be enough to cover your rising expenses here in Waco, TX? And how can you ensure you have proper financial planning for the years to come. Read on for a full explanation of the 2026 Social Security increase and the impact it will have.
I. The Basics of the Social Security Cost of Living Adjustment in 2026
As mentioned above, beginning in January 2026, your SSI and SSDI payments will be increased by 2.8%. This is a somewhat modest increase. 2025’s COLA was only 2.5%, but prior to that, there were increases of 3.2% in 2024 and 8.7% in 2023.
While individual benefits will be calculated separately, this will only amount to an increase of around $56/mo. for an average recipient in Waco, TX, or $672 across the year.
Is the 2026 SSI/SSDI Cost of Living Adjustment Enough?
The COLA announcement has sparked concern that it’s not enough to compensate for rising costs among seniors and the disabled.
Traditionally, COLA increases are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, as the name suggests, CPI looks at the average price of items across the entire economy for people who are actively working. That means it does not necessarily reflect the increasing costs for seniors and people on disability.
Furthermore, there is a Consumer Price Index for the Elderly (CPI-E) which could be used, but currently it is not.
So, there is reason to wonder if the 2026 COLA will be enough to cover rising costs.
How Will the 2026 COLA Affect SSDI Income Limits?
For those receiving Social Security Disability Insurance, you should also be aware of how these Cost of Living Adjustments will affect your income limits and thresholds. Receiving SSDI is dependent on the recipient being unable to work, so there are strict limits on outside income to continue receiving SSDI benefits.
Under the new adjustments, in 2026 you will be able to earn up to $1,690/mo. without risking your benefits, which are up $70 over last year. If you are on SSDI due to blindness, you can make up to $2,830/mo., an increase of $130.
If you’re careful, you’ll be able to bring in a bit more income while still receiving SSDI.
II. The Importance of SSI/SSDI Financial Planning in Waco, TX
In short, these COLA increases will be a small help – but possibly not enough. $56/mo. won’t buy many extra groceries, with many basic consumer goods costing more every month. Nor is it likely to be a major help with rising medical costs.
If you’re on SSI or SSDI, it’s important to have quality financial planning, along with a Texas benefits lawyer who can help you fight for the maximum payout you’re allowed under the law. Finances may get even tighter in the year ahead, so you need professionals on your side to get the most from your SSI/SSDI benefits.
It may even be time to re-evaluate your long-term care plans and trust structures, to ensure ongoing financial stability, as well as protecting your assets. The right lawyer can help!
Should You Reassess Your Benefit-Timing Strategies?
If you are nearing retirement age, these 2026 Social Security COLA changes affect you as well.
Currently, you can claim retirement benefits as early as age 62, although there will be a permanent reduction in your benefits if you take early retirement. The penalty depends on how many months early you choose to retire. Otherwise, if you were born in 1960 or later, you can retire at age 67 and receive your full monthly benefits. Or you can delay retirement until age 70, which will increase your payout per month, based on how long you delay.
There’s no benefit to waiting until 71, however. Monthly benefits max out at 70.
Will you be able to make enough on SSI to cover your current and ongoing expenses? Now is the time to start looking into your finances and making final preparations for your transition into retirement.
Is Your Income Mix Prepared?
Part of your financial review should focus on looking at all your income sources, especially if you may be receiving Disability benefits along with standard SSI. Your income can affect your monthly payout. In addition, the combination of your existing income plus SSI/SSDI added on top could potentially affect your tax burden as well.
We recommend looking for a qualified accountant to examine your income sources and current tax burden, to ensure there are no unpleasant surprises when your retirement benefits begin.
Legal Guidance Still Matters
While it’s true that COLA changes to SSI and SSDI almost always result in larger payouts, those cost-of-living increases are unpredictable. You may have a ‘windfall’ year such as in 2023, or a relatively minor income boost like with the current COLA. You cannot rely on the increases alone to keep pace with your own real-world expenses. Financial stability depends on effective planning and management of your disability benefits.
Merryl Jones – The Second Chance Lawyer – can be part of that team! If you’ve applied for Social Security Disability benefits in Waco, TX, and been denied we will fight to get you a second chance at the money you need to pay your bills. Merryl Jones has won benefits for 98% of the clients she’s represented as a Social Security disability lawyer – and she may be able to do the same for you!
