In 2026, all benefits issued by the Social Security Administration (SSA) will be increased by a modest 2.8%. This increase is called the Cost of Living Adjustment (COLA) and it is implemented annually so as to counter the effects of inflation. The COLA is not the sole change implemented to the Social Security program on a yearly basis. Important Social Security policies such as the maximum taxable earnings, or the retirement earnings limit also tend to increase from one year to the next and the case is no different for 2026.
Another less desirable increase that is slated for 2026 is the Medicare Part B premium, which is said to face a 9.7% increase. While Medicare premium hikes eat away at benefit checks, the silver lining for seniors aged 65 and older is the additional tax relief of $6,000 to $12,000 under the One Big Beautiful Bill Act. Though temporary, this tax break will exempt most seniors from paying taxes on their Social Security income. As such, here is everything you need to know about some of the upcoming Social Security changes.
2.8% COLA increase
Since 1975, Social Security benefits have been automatically adjusted for a rise in inflation from one year to the next. This is known as the COLA, and on October 24th, the SSA announced a 2.8% COLA increase for 2026. A benefit increase of 2.8% roughly translates to around $56 more per month on average, with the average retiree check currently totaling to $2,008. Since the COLA is a percentage increase rather than a set dollar figure, the actual amount each respectively beneficiary will receive is going to vary.
In its official COLA announcement, the SSA stated that personalized COLA notices will be mailed out by early December. Alternatively, recipients can view their COLA increase online via their my Social Security account. The SSA does, however, note that the account needs to have been set up by November 19th latest.
“The cost-of-living adjustment notice was available online for beneficiaries who have a my Social Security account starting Nov. 12, with all notices scheduled to be available online by Dec. 12,” according to an SSA spokesperson. “Paper statements will be sent in the mail starting Dec. 1, with all beneficiaries slated to receive their statements by the end of December.”
Medicare premium hike
Seniors aged 65 and older who claim Social Security will likely also be enrolled in Medicare, which is a federal health insurance program. If you are enrolled in Medicare Part B, it is important to note that the cost of the premium will be increasing by 9.7% in 2026. Earlier estimates from the Medicare trustees projected an 11.6% increase. While the 9.7% increase is somewhat lower than the earlier projections, it is still a substantial increase nonetheless. Currently, Part B premiums cost seniors $185, not to mention that this fee is automatically deducted from Social Security benefits.
When the increase takes effect in 2026, the cost of the Part B premium will rise to $202.90. According to Mary Johnson, an independent Social Security and Medicare analyst, this is “the second-highest increase in the program’s history.” For lower-income earners, this premium hike will eat away the full COLA increase before their benefit checks even reach their accounts. In these cases, the hold harmless provision kicks in, however, “some beneficiaries are excluded from that protection, such as new retirees and those with higher incomes who pay more than the standard premium,” as per TSCL.
Senior tax relief under OBBBA
In July, the One Big Beautiful Bill Act was signed into law and included in the lengthy legislation is a temporary tax relief for seniors aged 65 and older. As per the bill, seniors aged 65 and older with an income of $75,000 for single filers and $150,000 for joint filers will receive a “bonus” $6,000 and $12,000 tax deduction respectively. This tax break will only be in effect for a temporary period ending in 2028.
According to estimates from the Urban-Brookings Tax Policy Center, “those who benefit the most will be seniors who earn between $80,000 and $130,000, who would see an average tax cut of about $1,100.”