Dec 17, 2025
A cost-of-living adjustment, or COLA, is the annual increase to Social Security benefits designed to help retirees keep pace with inflation. And when the 2026 COLA landed at 2.8% (1), many retirees welcomed the news. On average, this adds about $56 a month to benefits starting in January (2).
But that percentage doesn’t translate into the same dollar increase for everyone. According to a new analysis highlighted by USA Today, retirees in five states are positioned to see a noticeably larger cash boost — what the outlet calls a “sizable advantage” (3).
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That edge isn’t about special state perks or policies. It comes down to how Social Security benefits are calculated, and why some retirees start with higher monthly checks than others. Here’s why some people see more of an advantage, and the five states getting the biggest boost in 2026.
What’s behind the ‘sizable advantage’
While everyone receives the same 2.8% COLA, the dollar value of that increase depends on your existing benefit. Social Security calculates monthly payments based on your 35 highest-earning years, adjusted for inflation. Higher lifetime earnings generally lead to a higher base benefit.
Because the COLA is applied as a percentage, retirees with larger monthly checks get a larger raise in real dollars.
For example, a retiree receiving $2,200 a month would see about a $61 monthly increase from a 2.8% COLA. Someone receiving $1,600 a month would see closer to $45. Same percentage, different purchasing power.
States with higher average wages over time tend to have retirees with higher baseline benefits, which is why the COLA translates into bigger monthly increases there.
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Five states getting the biggest 2026 boost
Even though the COLA percentage is the same nationwide, retirees in these states are projected to receive the largest average monthly increases because their baseline benefits are higher. The figures below reflect average monthly benefits after the COLA, and the average monthly increase (1):
- Connecticut: +$60.66 increase to $2,227
- New Jersey: +$60.57 increase to $2,224
- New Hampshire: +$60.11 increase to $2,207
- Delaware: +$59.97 increase to $2,202
- Maryland: +$58.96 increase to $2,165
These are monthly increases, not one-time bumps, which means the difference adds up over the course of the year.
Why this matters for cost-conscious retirees
For the roughly 53 million retired-worker beneficiaries (5), Social Security isn’t just a bonus, it’s critical income. And for 22 million older adults, it helped lift them above the federal poverty line in 2023, according to the Center on Budget and Policy Priorities (6).
That average $56 monthly increase may sound modest, but over a year it’s roughly $670. For a retiree in Connecticut seeing a $60.66 increase, that’s about $728 annually. That’s money that can help cover groceries, utilities or out-of-pocket health costs.
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At the same time, higher nominal increases don’t guarantee stronger purchasing power. In high-cost areas, even a $50 to $60 monthly boost can be quickly absorbed by rising housing, insurance or medical expenses.
The takeaway isn’t that retirees should move to chase a slightly bigger COLA. It’s that understanding how your benefit compares and how far it stretches where you live helps you make smarter budgeting decisions
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
What you should do now to make the most of your COLA
You don’t need to move states to benefit. Think of the COLA the way you’d think about a small raise at work: easy to spend, but more powerful when used intentionally.
- Delay claiming or continue part-time work (if applicable), as benefits are based on lifetime earnings and claiming age. Delaying can raise your baseline benefit, yielding larger future COLAs.
- Plan before you spend. Instead of letting the extra money disappear into day-to-day spending, decide ahead of time where it helps most — whether that’s building a small buffer, covering annual expenses or funding a planned purchase.
- Watch the big drains. Housing, insurance and health care are the most common places COLA gains get eaten up. Even small reductions here can make your raise feel bigger.
Not everyone gets the same boost: What to remember
The “sizable advantage” in these five states isn’t caused by state policy or special treatment. It reflects lifetime earnings before retirement.
Used intentionally, a COLA can help cover rising essentials, rebuild a cushion after inflation shocks or reduce pressure on other savings. While you can’t control the COLA percentage, you can control how effectively it works for you. By understanding where your benefit stands, protecting your baseline when possible and making deliberate choices about spending and saving, you can turn a routine adjustment into a real step toward greater peace of mind in retirement.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Motley Fool (1, 5); Social Security Administration (2); USA Today (3, 4); Center on Budget and Policy Priorities (6)
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With a writing and editing career spanning over 13 years, Emma creates and refines content across a broad spectrum of industries, including personal finance, lifestyle, travel, health & wellness, real estate, beauty & fitness and B2B/SaaS/tech. Her versatility comes through contributions to high-profile clients like Moneywise, Healthline, Narcity and Bob Vila, producing content that informs and engages, along with helping book authors tell their stories.
