3 Ways to Maximize Your 2026 Social Security COLA

Social Security recipients should see their paychecks increase this month. That’s because benefits are getting a 2.8% cost-of-living adjustment, or COLA.

A 2.8% increase is by no means the most generous Social Security COLA to ever arrive, but it’s also not the stingiest. In fact, last year, Social Security benefits only rose 2.5%, so a 2.8% COLA is already an improvement.

But that doesn’t mean you’ll be rolling in money once your Social Security checks increase by 2.8%. Persistent inflation has been wreaking havoc on many seniors’ income. And with the threat of tariffs continuing to loom, 2026 could prove to be another year when living costs keep going up without relief in sight.

If you’re on Social Security, it’s important to do what you can to make the most of your 2026 COLA. Here’s how.

1. Invest the money if you don’t need it

Many Social Security recipients don’t have income outside of those monthly benefits and need every penny to cover their basic needs. But if you have other income streams — perhaps savings or a part-time job — then you may not be spending your Social Security paycheck each month in full. If that’s the case, consider taking your COLA and investing it.

You might assume that investing your COLA won’t get you very far, especially if you’re only talking about $50 or so per month. But if you buy shares of a low-cost dividend ETF, you can set yourself up with ongoing income that may come in handy over time.

2. Rethink your retirement budget

Your 2026 COLA gives you an opportunity to reimagine your total retirement budget. Take a look at your various expenses and identify whether there are small items missing from your budget that would enhance your quality of life.

Your COLA, for example, may be enough to outsource one home maintenance task you currently do yourself. If that alleviates a physical strain, it may be worth paying for.

Or, you may decide to use your COLA to socialize a bit more. That extra money could pay for two more lunches a month with friends, which could improve your mental health and wellbeing.

3. Manage your health wisely

You may or may not be disappointed in your modest 2026 COLA. Either way, one thing it pays to do is try to stretch it by making smart decisions in the context of healthcare.

Healthcare tends to be a huge expense for retirees. But managing your health and Medicare plan benefits wisely could help you get more out of your COLA.

Figure out what free health benefits you’re entitled to, and stay on top of minor medical issues before they escalate and cost more. At the same time, you can also use your COLA to get ahead of health issues you may have ignored.

If your doctor has been telling you to lose weight, for example, your COLA may be enough to pay for a fitness club membership that helps you get into better shape. Or it may be enough to swap some less healthy foods you eat regularly with more nutritious ones.

It’s worth allocating that money to your health, as it could lead to not just longevity, but financial savings.