Will You Lose Part of Your 2026 Social Security COLA Increase?

Social Security benefits are set to rise by 2.8% in 2026, following the annual cost-of-living adjustment (COLA). However, not every retiree will see the full increase in their monthly checks. Rising Medicare costs could reduce how much many seniors actually receive.

The Social Security Administration (SSA) officially announced the 2026 COLA on October 24, after a brief delay caused by the recent government shutdown. For most retirees, the adjustment means an average boost of about $56 per month starting in January. But for millions of Americans also enrolled in Medicare, the net gain could be smaller.

How Rising Medicare Premiums Could Cut Into Social Security Benefits

Social Security COLAs are tied to inflation and are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July through September. The 2.8% increase for 2026 is meant to help seniors keep up with rising living costs, but Medicare expenses are rising even faster.

Currently, Medicare Part B — which covers outpatient services — costs $185 per month. According to projections from the Medicare Trustees, that figure could climb to around $206.50 in 2026, a jump of nearly 12%. Since most retirees have their Part B premiums deducted directly from their Social Security checks, the higher cost will eat into their COLA.

For the average recipient, this means that while the gross benefit may rise by $56 a month, the net increase could be closer to $34.50 once the higher premium is factored in. That difference may not seem large, but over a year, it adds up — especially for retirees on fixed incomes already dealing with higher food, housing, and utility costs.

Some seniors may avoid this offset if they are not yet enrolled in Medicare, particularly those who claimed Social Security early at age 62 but haven’t reached Medicare eligibility at 65. Still, for the majority of retirees, Medicare costs are unavoidable and directly reduce their COLA benefit.

Why This Matters for Retirees in 2026

The 2.8% COLA may look solid on paper, but with rising healthcare expenses, many retirees will feel little improvement in their monthly budgets. Inflation has slowed compared to previous years, but essentials such as medical care and insurance premiums continue to rise faster than the overall CPI-W.

Medicare Part D (prescription drug coverage) and Medicare Advantage plans could also see cost increases next year. Seniors are encouraged to review their options during the current open enrollment period, which runs through December 7. Switching to a less expensive plan might help offset some of the impact of higher Part B premiums.

Experts note that while the COLA ensures some level of inflation protection, it rarely matches the real increase in retirees’ living costs. Those depending heavily on Social Security may need to consider additional adjustments, such as downsizing, supplementing income through part-time work, or optimizing their Medicare coverage choices.

In short, while Social Security’s 2026 COLA provides a modest increase, higher Medicare costs could significantly dilute that raise for many retirees. Understanding these changes now can help you plan your finances more effectively before the new rates take effect in January.

FYI (keeping you in the loop)-

Q1: How much will Social Security benefits increase in 2026?

The 2026 Social Security COLA is set at 2.8%, translating to an average increase of around $56 per month for retirees.

Q2: Why might some retirees not get the full COLA?

Rising Medicare Part B premiums, expected to increase to about $206.50 in 2026, will reduce the net gain for retirees who have premiums deducted from their checks.

Q3: When does the new COLA take effect?

The 2026 COLA will be applied to Social Security payments starting in January 2026.

Q4: Can retirees do anything to offset the Medicare premium increase?

Yes, during Medicare’s open enrollment (ending Dec. 7), retirees can explore cheaper Part D or Medicare Advantage plans to reduce total healthcare costs.

Q5: Who benefits most from the 2026 COLA?

Retirees not yet on Medicare, or those with supplemental coverage that minimizes Part B costs, will see the largest benefit from the COLA increase.