If you’re one of the more than 74 million Americans relying on Social Security, you’ve probably heard the latest buzz: a projected 2.8% cost-of-living adjustment (COLA) for 2026.

At first glance, that sounds like a win—after all, who doesn’t want a little extra in their monthly check?

But before you start planning a celebratory dinner, there’s a catch: rising Medicare premiums and other out-of-pocket health costs may gobble up most (if not all) of that increase.


Every fall, the Social Security Administration (SSA) announces the COLA for the coming year, based on inflation data from July through September.

This adjustment is meant to help benefits keep pace with the rising cost of living. For 2026, analysts are estimating a 2.8% bump, thanks to a recent uptick in inflation—annual inflation hit 2.9% in August, the highest so far this year.

If you’re receiving the average Social Security benefit of $1,864.87 per month, a 2.8% increase would add about $52 to your monthly check. Not exactly a windfall, but every bit helps, right?


Medicare Part B premiums—the ones that cover doctor visits and outpatient care—are also expected to rise sharply. The latest estimate? A jump from $185 to $206.50 per month, a $21.50 increase. That’s nearly as big as the record-setting $21.60 jump in 2022.

And that’s just Part B. If you have a standalone Part D prescription drug plan, brace yourself: premiums could rise by as much as $50 per month in 2026, up from a $35 cap in 2025.

With more than 33 million Medicare beneficiaries enrolled in these plans, that’s a lot of folks facing higher out-of-pocket costs.

So, while your Social Security check might go up by $52, you could easily see $21.50 (or more) of that swallowed by Medicare Part B, and potentially even more if your drug plan premium increases. For many, the net gain could be minimal—or even negative.


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You might be wondering: If COLA is supposed to keep up with inflation, why does it feel like we’re always falling behind?

The answer lies in how COLA is calculated. The SSA uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which doesn’t always reflect the real spending patterns of older Americans.

For example, healthcare costs—one of the biggest expenses for retirees—often rise faster than the general inflation rate. So, even when COLA goes up, it may not be enough to cover the true cost of aging in America.


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As Ramsey Alwin, president of the National Council on Aging, puts it, “The estimated COLA might reflect the inflation rate, but it doesn’t reflect the true cost of aging well in America. The Medicare premium will likely eat up the little extra money they receive.”

The financial squeeze is real, and it’s getting tighter. According to the Census Bureau, the poverty rate among adults 65 and older rose to 15% in 2024—the highest of any age group and the only group to see an increase. Nearly a million more seniors fell into poverty last year alone.

Claire Casey, president of the AARP Foundation, didn’t mince words: “Low-income seniors are falling behind. More work needs to be done so everyone can age with dignity and security.”

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How are rising Medicare costs affecting your budget? Do you feel the annual COLA is enough to keep up with your expenses? Have you found creative ways to stretch your Social Security check further?