Social Security beneficiaries can expect to a slight increase their benefits as of January 2026. This results from the cost-of-living adjustment (COLA). The COLA is designed to help retirees and others on Social Security keep up with inflation.
According to data, the 2026 raise is projected to be approximately 2.7% to 2.8%. So, what exactly does this mean? For example, if someone receives a monthly benefit of approximately $2,000, they will get an increase of about $54. Let’s see what this increase will go towards:
The Catch: A Bigger Medicare Deduction
It’s important to note that Medicare premiums is automatically deducted from Social Security benefits for most retirees. Unfortunately, in 2026, Medicare Part B premiums is expected to increase.
Medicare trustees anticipate that the usual monthly Part B premium may increase from $185 to approximately $206.50 per month. That’s an increase of about $20 per month, and for many people, it will eat up most, if not all, of their COLA raise.
Yes you may get a bigger Social Security check, but the Medicare premium deduction will actually reduce the amount that is deposited into your account.
Why This Matters
You may ask why this matters? Well, millions of Americans rely on Social Security as form of financial support and yes, an increase can make a difference but when it’s immediately reduced by deductions of premiums, it leaves people in a stressful situation.
Retirees are already pressurized with the increasing costs of food, rent and utilities.
How Does Inflation Affect Retirees?
Especially for retirees who live on fixed incomes, inflation is major burden. Retirees struggle to keep up with the rising costs of the economy.
Retirees must mitigate their debt in order to have a peaceful retirement. It is advisable to work with a financial advisor to assist in making wise decisions to protect your finances. The goal is to ensure that your essential expenses are well taken care of.
Supporters vs. Critics
As always, there are supporters and opposers. Supporters note that the COLA would assist retirees keep up inflation. If these raises did not exist, it would be even more difficult for beneficiaries to cope.
The opposers of the system note that the COLA does not highlight the actual expenses of seniors and urge that the system be updated to ensure a true reflection of expenses (especially medical expenses).
What You Can Do to Prepare
If you receive Social Security, here are some steps to help you prepare for 2026:
- Relook at your Medicare premiums: Try and do some calculations beforehand, consider an increase in your premiums and see how much you would potentially receive after deductions
- Review your budget: Prioritise spending on important things and cut out unnecessary things from your budget.
- Stay informed: Keep an eye out for the exact rate and how it impacts your particular circumstances when the official COLA is revealed in October 2025.
- Look into other assistance programs: If higher healthcare costs maximize your budget, check if you qualify for programs that help with Medicare premiums or prescription drug costs.
The Bottom Line
The important thing to remember is this, yes Social Security recipients are getting an increase in 2026, but how far that increase goes is something to be mindful of. Many retirees will feel the negative impact as Medicare premiums increase and will automatically be deducted from their Social Security checks.
It is important for beneficiaries to stay informed with verified information so that they are able to plan accordingly. If they require assistance, consider speaking to a financial advisor as they provide advice on how to secure your financial future.