Imagine getting a small raise at work—just enough to make you smile—only to find out that your rent just went up and your phone bill doubled. That’s kind of what’s happening to millions of Americans on Social Security as they look ahead to 2026.
According to the latest projections, seniors and other beneficiaries are expected to receive a 2.7% Cost-of-Living Adjustment (COLA) in 2026. Sounds helpful, right? Especially with inflation still nudging prices upward. But here’s the twist: Medicare Part B premiums are also going up, and the increase might cancel out your COLA boost—especially if you receive smaller Social Security checks.
Let’s break this down together.
What’s behind the 2.7% COLA?
The 2.7% increase is based on inflation data released in June, which showed:
- Prices for everyday items like food and transportation rose 2.6% in June.
- Overall, inflation is up 2.7% over the year, slightly more than May’s 2.4%.
- The Federal Reserve wants 2% inflation, but we’re running a bit hot.
To keep pace, the Social Security Administration adjusts benefit payments annually so seniors can still afford the basics. But this year’s gain might not feel like much…
The medicare twist
Here’s the not-so-fun part:
Medicare Part B premiums are set to rise too—from $185 to $206.50 per month. That’s a:
- 💥 $21.50 increase monthly
- 🔺 11.6% spike in your healthcare premium
If you’re thinking, “Wait, didn’t that happen before?” Yes! The last major increase was in 2022, when premiums shot up 14.5%.
So if your Social Security check is on the smaller side, this increase could completely wipe out your COLA.
Who’s hit the hardest?
Policy analyst Mary Johnson warns that:
- For retirees earning around $800 a month, the $21.50 Medicare bump could erase their entire COLA gain.
- That leaves little (or nothing) left for rising food, housing, or utility costs.
In May 2025, 74.3 million Americans were receiving Social Security, with an average monthly payment of $1,860.64.
This includes:
- Retirees
- People with disabilities
- Survivors and widows
- SSI recipients
Final COLA decision: still in the works
The Social Security Administration won’t lock in the 2.7% COLA until fall. Why? They use inflation data from July to September to calculate the final number. So the next few months will be crucial.
Key takeaways (Points Recap)
- ✅ COLA for 2026 is projected at 2.7%
- 📉 Inflation is driving this increase, but Medicare is rising too
- 💲 Medicare Part B will cost $206.50/month in 2026—up $21.50
- 😟 Those with low benefits could see their entire raise eaten up
- ⏳ Final COLA will be announced after September 2025
FAQs: What you need to know
Q: What is a COLA?
A: COLA stands for Cost-of-Living Adjustment, an annual Social Security increase based on inflation.
Q: When will the final COLA be announced?
A: Around October 2025, after reviewing July–September inflation data.
Q: How much will Medicare Part B cost in 2026?
A: $206.50 per month—an 11.6% increase from 2025.
Q: Will everyone feel the Medicare impact?
A: Those with lower benefits (under $800/month) will feel it the most, as the premium hike could wipe out their COLA.
Q: Can this change again?
A: Yes. The COLA and Medicare estimates are projections and may shift based on future economic data.
The bottom line
A 2.7% raise sounds like good news… until the Medicare bill lands. While Social Security tries to help Americans keep up with inflation, rising healthcare costs are quickly outpacing those gains.
So, if you’re budgeting for 2026, keep your calculator—and your coffee—close. Things might not add up the way you’d hoped.
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