The Social Security Administration (SSA) announced a 2.8% Cost-of-Living Adjustment (COLA) for 2026, adding about $55 more per month for the average retiree receiving Social Security retirement benefits.
The 2026 COLA doesn’t just affect retirees; it also applies to Supplemental Security Income (SSI) payments, which help low-income older adults and people with disabilities cover basic living expenses.
While any increase is welcome, there’s an important catch: Medicare premiums are also rising, which means this “raise” may not stretch as far as many hope.
If you’re among the nearly 75 million Americans receiving Social Security or SSI benefits, you’ll see a 2.8% increase in 2026, based on data from the Social Security Administration (SSA). Understanding how this adjustment works and where it goes can help you plan your 2026 budget more effectively.
This article explains what the 2026 Social Security COLA means for your monthly check, how it ties into Medicare costs, and what steps you can take to make the most of it.
The annual COLA increase applies to all Social Security beneficiaries, including retirees, survivors, and people receiving disability benefits.
It also covers Supplemental Security Income (SSI) recipients. For SSI, the 2.8% increase takes effect on December 31, 2025, while most Social Security beneficiaries will see their higher payments starting in January 2026.
Beginning in January 2026, Social Security recipients will see their benefits increase by 2.8 percent. According to the Social Security Administration, this marks the third consecutive year of smaller COLA adjustments following the record 8.7% increase in 2023.
The adjustment is based on the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), which the Bureau of Labor Statistics uses to measure price changes for goods and services. This formula is designed to help Social Security benefit amounts keep pace with inflation, but as we’ll see, it doesn’t always reflect the actual expenses retirees face.
In short, COLA helps offset rising costs, but it doesn’t always keep pace with real-world expenses like healthcare, housing, and prescription drugs.
Review your 2026 budget today. Call (623) 223-8884 to estimate your new Social Security check, see how Part B and drug costs may offset your COLA, and compare Medicare plans to control out-of-pocket costs.
To understand the 2026 Social Security COLA increase in context, it helps to look at the historical pattern of adjustments. The table below shows how COLA has fluctuated over the past several decades:
As the data shows, the 2.8% increase for 2026 falls within the middle range of historical adjustments. Since automatic COLAs began in 1975, the average annual increase has been about 3.2%.
The 2026 adjustment is well below the double-digit increases of the high-inflation 1970s and early 1980s, as well as the recent 2022 spike. However, it’s notably higher than the zero-increase years (2010, 2011, and 2016) and the minor adjustments seen in the mid-2010s.
Put 2026’s 2.8% COLA in context. Call (623) 223-8884 to size your new benefit against past years, estimate take-home after Part B and prescription drug costs, and tune your Medicare plan so your budget stays on track in the new year.
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Local, licensed insurance agents with 25+ years of experienceHere’s where things get complicated. Most people with Medicare Part B have their monthly premium automatically deducted from their Social Security benefit. As a result, many don’t see the full 2026 Social Security COLA increase reflected in their bank account.
On November 14, 2025, the Centers for Medicare & Medicaid Services (CMS) announced the standard Medicare Part B premium would rise from $185 in 2025 to $202.90 in 2026. That represents a $17.90 monthly increase, or about a 9.7% jump, significantly higher than the Social Security COLA increase in 2026.
Let’s break down what this means for the actual take-home benefit of the average retired worker:
Some beneficiaries face even steeper challenges. Those subject to Income-Related Monthly Adjustment Amounts (IRMAA) —higher-income Medicare beneficiaries who pay more for Part B and Part D —may see even less of their COLA increase, or in some cases none at all.
Retired Americans. (April 2025). Social Security Figures – 2025 Fact Sheet.
See your real raise after Part B (and IRMAA). Call (623) 223-8884 to estimate your 2026 net check, review Part D drug costs, and compare Medicare plans to cut out-of-pocket expenses.
If you’re looking for ways to keep more of your 2026 Social Security COLA increase, one option worth exploring is a Medicare Advantage plan with a “Part B giveback.”
These plans, also known as Part B premium reduction plans, are offered by certain private insurers approved by Medicare. They refund part—or in some cases all—of your monthly Part B premium directly through your Social Security check. That means you could see a slightly larger take-home benefit each month.
When you enroll in a qualifying plan, Medicare still deducts the standard Part B premium from your Social Security benefit as usual. The private plan then credits back a portion of that premium, up to $202.90 per month, depending on your area and carrier. The exact amount varies by plan and location.
Note that not all Medicare Advantage plans include this feature, and those that do may trade off other benefits like dental, vision, or prescription coverage. Comparing plan details carefully is key.
See if a giveback plan fits your budget. Call (623) 223-8884 to check availability in your area, estimate your net COLA after Part B and IRMAA, and compare trade-offs for the new year.
Many advocates and organizations have long argued that the current COLA formula doesn’t accurately reflect retiree spending patterns. A detailed Investopedia article states that between 2010 and 2024, while COLAs increased by 58%, expenses for retirees rose by 73%.
The CPI-W is designed for working households, not retirees. It underrepresents expenses most common for older Americans, such as:
Research from organizations like The Senior Citizens League shows that retiree expenses have risen about one percentage point faster per year than the CPI-W over the past two decades. This gap means that Social Security benefits gradually lose purchasing power over time, even with annual COLA adjustments.
Many advocacy organizations, including The Senior Citizens League (TSCL) and the National Committee to Preserve Social Security and Medicare (NCPSSM), have urged Congress to adopt the CPI-E (Consumer Price Index for the Elderly) instead of the CPI-W. The CPI-E better reflects retirees’ real costs, especially for healthcare, housing, and prescription drugs, which tend to rise faster than average inflation.
If you believe COLA adjustments should better match retiree expenses, there are a few ways to make your voice heard:
Make your COLA go further. Call (623) 223-8884 for a quick review of Part B, drug costs, and Medicare plan options that can lower out-of-pocket spending.
Free, unbiased serviceCompare all major plans and carriers Local, licensed insurance agents with 25+ years of experienceSmaller COLA adjustments combined with rising healthcare costs create a challenging financial reality for many retirees. Here’s what you should expect:
Tighten your 2026 budget now. Call (623) 223-8884 to estimate your net COLA after Part B and drug costs, review Medicare options (including Part B giveback plans), and lower out-of-pocket expenses—so more of your raise stays in your pocket.
Agent tip:
Even a small COLA increase can impact your Medicare plan eligibility, premiums, or subsidy levels. A licensed Medicare agent can help you compare Medicare plan options side-by-side and check if your COLA increase changes your IRMAA bracket.
One of the most effective ways to protect your budget is reviewing your Medicare coverage during the Annual Enrollment Period (October 15–December 7). Plans change every year, and comparing your options can help you find better value or more comprehensive coverage for 2026.
Whether you have Original Medicare with a Medigap plan or a Medicare Advantage plan, taking time to shop around can make a real difference. Licensed Medicare insurance agents provide free, one-on-one help reviewing your plan options, no sales pressure, just expert guidance.
Lock in better coverage. Call (623) 223-8884 for a free, no-pressure Medicare review during the Annual Enrollment Period (Oct 15–Dec 7). We’ll compare plans, confirm doctors and drugs, and help you cut out-of-pocket costs before deadlines.
The 2026 Social Security COLA increase provides a modest cushion against inflation, but rising Medicare premiums and living costs mean most retirees will feel little change in take-home benefits. While the 2.8% adjustment helps, it won’t fully offset the financial pressures many older Americans face.
Staying proactive about your Medicare plan and annual costs is the best way to make your 2026 “raise” count. Review your coverage, understand your options, and don’t hesitate to reach out to a licensed Medicare insurance agent for personalized support.
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The average retiree will see about $55 more per month starting in January 2026, before any Medicare premium deductions are applied.
Yes. Most beneficiaries will see part of their increase go toward the 2026 Part B premium, approximately $206.50, leaving a net gain of around $34.50 per month.
Inflation and healthcare costs often rise faster than the CPI-W formula used to calculate COLA, particularly for expenses that retirees face most.
The 2.8% adjustment is lower than the 8.7% increase in 2022 and the 5.9% increase in 2021, but higher than the 2.5% in 2024 and the 3.2% in 2023. It represents a return to more moderate adjustments after the high-inflation period of 2021-2022.
Review your Medicare coverage during Open Enrollment (October 15–December 7) and compare plan options to ensure you’re getting the best value for your needs and budget.
Read more by Renee van Staveren
Since 2009, I've been writing about complicated, technical issues, with the goal of making topics like Medicare and healthcare easier to understand. I've been writing about Medicare since 2021 and healthcare since 2019. I am an AmeriCorps alumni. I enjoy gardening, reading, and DIYing.
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