Retirees could see a slightly bigger boost to their Social Security checks in 2026. The latest projections suggest the cost‑of‑living adjustment (COLA) will come in at 2.7% to 2.8%, up from the 2.5% increase in 2025. While this is welcome news, rising healthcare costs — especially Medicare premiums — may eat into much of the gain.
What Is COLA and How Is It Calculated?
The Social Security COLA is designed to keep benefits in line with inflation. It’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W), which measures price changes for goods and services during July, August, and September each year.
Higher costs for gas, housing, and medical services in 2025 have pushed the forecast slightly above last year’s increase.
How Much More Could Retirees Get?
For the average retiree receiving about $2,008 per month, a 2.7% increase means roughly $54 extra each month. If the final number is 2.8%, the increase would be a dollar or two higher.
However, Medicare Part B premiums are expected to rise from $185 in 2025 to about $206.50 in 2026. Since these premiums are deducted directly from Social Security checks, nearly 40% of the COLA increase could be offset, leaving retirees with closer to $32–33 extra per month.
Other Social Security Changes in 2026
- Full Retirement Age: Reaches 67 for those born in 1960 or later
- Taxable Wage Base: Maximum earnings subject to Social Security tax will rise
- Earnings Limits: Higher thresholds for those claiming benefits before full retirement age
What This Means for Retirees
- Modest Relief: The increase helps, but may not fully cover rising costs for healthcare, housing, and food
- Budget Planning: Factor in higher Medicare premiums and prescription drug costs
- Long‑Term Outlook: The projected COLA is far below the historic 8.7% jump in 2023, showing inflation has cooled but not disappeared
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Final Takeaway
The 2026 COLA offers a modest bump for retirees, but rising healthcare costs will limit the real impact. The official number will be announced in mid‑October 2025, but early planning can help retirees make the most of their benefits in the year ahead.