The Social Security Administration (SSA) has implemented significant changes that impact millions of beneficiaries. President Joe Biden signed the Social Security Fairness Act into law on January 5th, effectively repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These provisions previously reduced or eliminated benefits for certain public sector workers.
Around 2.8 million people, including teachers, firefighters, police officers, federal employees, and those covered by foreign social security systems, will benefit from the Fairness Act. They will see an increase in their monthly benefit amounts and receive a lump sum retroactive back payment dating back to January 2024. The SSA has already adjusted approximately 91% of the impacted cases.
In addition to the Fairness Act, the SSA is preparing for the 2026 Cost of Living Adjustment (COLA). The COLA is calculated annually using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) of the third quarter of each year.
Social security fairness act impact
Brooke Petersen, a wealth consultant at Conrad Siegel, explains that the COLA is based on the percentage increase in the CPI-W from the previous year’s third quarter to the current year’s third quarter. For 2025, the COLA was calculated to be a 2.5% increase, resulting in an approximate $50 bump to monthly checks as of January. As we approach the halfway mark of the year, COLA predictions for 2026 have emerged.
The nonpartisan Senior Citizens League initially projected a 2.4% COLA for 2026 in May, which would mean an additional $46.80 per month for the average benefit recipient. However, on June 11, the Senior Citizens League revised this figure to 2.5%, suggesting that 2026 could potentially have the same COLA as 2025. If inflation rises further during the calculation period, the 2026 COLA could be even higher.
It is important to note that each COLA is a permanent increase to the monthly benefit amount. While a 2.5% increase may seem small, these adjustments accumulate over the years of retirement. The official COLA for 2026 will be announced by the SSA in October.