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As inflation continues to shape the economic landscape for seniors, the 2026 Social Security Cost-of-Living Adjustment (COLA) is projected to rise by 2.7%, slightly up from last month’s 2.5% estimate.
While this increase may seem like good news, many retirees could see their raises wiped out by a steep 11.6% increase in Medicare Part B premiums.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 2.6% in June, pushing the COLA forecast slightly higher.
However, with Medicare Part B premiums jumping from $185.00 in 2025 to $206.50 in 2026, many Social Security beneficiaries—especially those with lower monthly payments—are expected to lose much or all of their raise.
Let’s dive into the details of what’s changing in 2026, how COLA is calculated, and what this means for millions of Americans relying on Social Security.
What Is the 2026 COLA and How Is It Calculated?
Cost-of-Living Adjustments (COLAs) are designed to help Social Security beneficiaries keep up with inflation. Each year, the Social Security Administration (SSA) determines COLA based on the average CPI-W from July to September.
- Current projected COLA for 2026: 2.7%
- June CPI-W increase: 2.6%
- Overall inflation (as of June 2025): 2.7%
While 2.7% may sound like a reasonable adjustment, it’s only slightly above the Federal Reserve’s 2% inflation goal. Historically, this increase aligns closely with the 21-year average COLA of 2.6%.
Medicare Part B Could Erase the Gain
According to the 2025 Medicare Trustees Report, Medicare Part B premiums are expected to jump from $185.00 in 2025 to $206.50 in 2026—an increase of $21.50 per month, or 11.6%.
This is the largest Part B premium hike since 2022 when it rose by 14.5%.
Since the SSA automatically deducts Medicare Part B premiums from most recipients’ Social Security checks, the higher premium could effectively neutralize the 2.7% COLA increase.
“A $21.50 monthly increase would absorb the entire COLA for anyone receiving $800 or less in monthly benefits,” notes policy analyst Mary Johnson.
How COLA vs Medicare Impacts Retirees
| Category | 2025 | 2026 (Projected) | Change |
|---|---|---|---|
| Average Monthly SS Benefit | $1,860.64 | $1,911.79 (with 2.7% COLA) | +$51.15 |
| Medicare Part B Premium | $185.00 | $206.50 | +$21.50 (+11.6%) |
| Net Gain After Medicare Deduction | $1,675.64 (est.) | $1,705.29 (est.) | +$29.65 |
Note: For beneficiaries with lower monthly benefits (e.g., around $800 or less), the entire COLA could be canceled out by the Medicare premium hike.
Who Is Most Affected?
The most financially vulnerable Social Security recipients will feel the biggest pinch:
- Retired workers, especially women and minority groups, who statistically receive lower benefits
- Survivors and widows/widowers with spousal or survivor benefits
- Low-income retirees who already rely on Supplemental Security Income (SSI)
With COLA barely covering rising housing, food, and medical costs, seniors could see their real income fall despite nominal increases.
Key Numbers to Watch
- COLA forecast: 2.7%
- Medicare Part B premium increase: $21.50/month
- Beneficiaries receiving SS (May 2025): 74.269 million
- Average monthly SS benefit (May 2025): $1,860.64
What Should Seniors Do?
Here’s how beneficiaries can prepare and respond:
- Track inflation updates – July–September 2025 data will finalize the 2026 COLA.
- Review Medicare premium estimates – Prepare for the higher deduction in January.
- Explore supplemental support – Look into Medicare Savings Programs or state-based assistance if you’re at risk of income loss.
- Update My Social Security Account – Monitor for notices about upcoming benefit and deduction changes.
While a 2.7% COLA for 2026 may initially appear like good news, the projected 11.6% Medicare Part B premium increase may leave millions of seniors with little to no extra income.
The reality is that even when benefits rise, so do expenses—especially for healthcare, one of the largest cost burdens for retirees. For low-income recipients, this could mean another year of financial strain.
To make the most of your benefits, stay informed, plan ahead, and explore all available financial assistance options.
FAQs
When will the 2026 COLA be officially announced?
The Social Security Administration will release the official COLA in October 2025, based on CPI-W data from July to September.
Will everyone pay the same Medicare Part B premium?
No. While $206.50 is the standard rate, higher-income earners may pay more based on Income-Related Monthly Adjustment Amounts (IRMAA).
Can low-income seniors get help with rising Medicare costs?
Yes, programs like the Medicare Savings Program (MSP) and Extra Help can reduce or cover premiums, co-pays, and deductibles.