Each fall, Social Security beneficiaries wait to hear how much their checks will increase the following year.

This cost-of-living adjustment, or COLA, is meant to help retirees keep up with inflation.

For 2026, the adjustment is shaping up to be historically notable—but not necessarily in a good way.

While a boost is expected, most recipients may find the gains quickly erased by rising healthcare costs and outdated inflation calculations.

This “double whammy” could leave many older adults feeling like they’ve moved two steps forward and one (or more) steps back.

Many retirees may see their 2026 Social Security increase offset by rising Medicare premiums and everyday living expenses. Image Source: YouTube / CNBC.

What is COLA and why does it matter?

The cost-of-living adjustment (COLA) is the annual increase applied to Social Security benefits to help offset inflation.

Before 1975, benefit increases were irregular and based on congressional action.

Now, the Social Security Administration uses a formula tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

This index tracks over 200 goods and services, but it’s based on the spending habits of working-age city dwellers—not retirees.

That disconnect becomes more important when inflation hits essentials that older Americans rely on most.

Also read: A 2.8% Social Security COLA is on the horizon for 2026—but will it keep up with Medicare’s rising costs?

2026 may bring a notable COLA—but there's a catch

In recent years, COLAs have been larger than usual due to surging inflation.

After a 5.9% boost in 2022, 8.7% in 2023, and 3.2% in 2024, the 2025 increase landed at 2.5%.

For 2026, independent analysts and The Senior Citizens League estimate the COLA will be around 2.7-2.8%.

If confirmed, that would mark five straight years of COLAs above the historical average of 2.3%, a streak not seen since the late '80s and '90s.

But for many, that "raise" may not feel like much of a gain at all.

Also read: Are rising tariffs putting Social Security COLA at risk? Seniors are growing concerned

Why that increase may not help your budget

Unfortunately, 2026’s COLA could be canceled out by rising costs elsewhere.

Here are two big reasons why many beneficiaries might not feel much relief:

1. Your buying power is still shrinking

Although COLAs are designed to match inflation, the CPI-W doesn’t reflect the real-world expenses of retirees.

Older adults tend to spend more on healthcare, housing, and prescriptions—areas where prices are rising faster than the broader economy.

According to The Senior Citizens League, Social Security benefits have lost about 20% of their purchasing power since 2010.

So even with a bump in benefits, it may not be enough to catch up.

2. Medicare premiums are jumping significantly

Most retirees have their Medicare Part B premiums deducted directly from their Social Security checks.

In 2026, those premiums are expected to rise 11.5%, reaching $206.20 per month—a steep jump after two relatively stable years.

If your monthly COLA increase is around $54, a $21+ rise in Medicare costs could eat up nearly half of it—or more.

For some, the COLA might not cover the full cost of the premium increase, resulting in a smaller net payment.

Source: YouTube / FOX 26 Houston​

Also read: You could be missing out—3 Social Security COLA secrets everyone should know

Why does the COLA formula fall short?

The CPI-W, used to calculate COLA, reflects the spending habits of younger, working urban residents.

That means it weighs categories like transportation more heavily than categories like medical care or housing, which are more relevant to older adults.

Many advocates are calling for a switch to the Consumer Price Index for the Elderly (CPI-E), which better represents retiree spending patterns.

But for now, the CPI-W remains the standard.

Also read: Bigger benefits, smaller payoff? Medicare costs may cut into your next Social Security raise

How to prepare for a leaner 2026

While we can’t change the formula or stop Medicare increases, there are steps you can take to soften the blow:

1. Review your monthly budget. Take a close look at housing, healthcare, and prescription costs. Consider generic alternatives, discount programs, or senior assistance options.
2. Compare Medicare plans. During open enrollment, shop around. Switching to a Medicare Advantage or different Medigap plan could reduce your premiums or out-of-pocket costs.
3. Use available support programs. You might qualify for SNAP (food assistance), LIHEAP (home energy assistance), or local property tax relief programs.
4. Delay benefits if you haven’t started. If you’re eligible but haven’t claimed Social Security yet, waiting can increase your monthly benefit permanently.
5. Stay informed. Follow SSA and Medicare updates, and connect with local agencies or senior advocacy groups if you need help navigating changes.

Also read: Big Social Security changes are coming in 2026—here’s what to know now

Is reform coming?

Some lawmakers are pushing to change how COLAs are calculated and to cap Medicare increases for low- and middle-income retirees.

Ideas include switching to CPI-E or guaranteeing higher minimum benefits.

But major reform often moves slowly in Washington, so for now, most seniors will have to plan based on the current system.

Source: YouTube / AARP​

Read next: Retirees must see: This new Social Security update could affect your future

Key Takeaways

• The 2026 COLA is projected at around 2.7-2.8%, which would mark the fifth consecutive year above the long-term average.
• Despite the increase, many seniors will lose purchasing power due to higher costs for essentials like healthcare and housing.
• Medicare Part B premiums are expected to rise by 11.5% in 2026, potentially offsetting much of the COLA gain.
• Retirees can take steps to prepare, such as reviewing budgets, comparing Medicare plans, and exploring benefit programs.

Have rising costs changed how far your Social Security check goes? Are higher premiums putting a strain on your budget? Have you found any strategies that help stretch your benefits?

We’d love to hear from you in the comments. Let’s keep the conversation going and help each other stay informed and empowered—no matter what 2026 brings.

 

[Justme]

Pun intended, but health care is literally killing older, retired adults. You can't afford the necessary care, and the insurance premiums are unreasonable. Even when you can scrape up enough to afford a Doctor's visit, you often can't afford the medication, or your insurance plan doesn't cover it. Insurance is the biggest ripoff in America today. Can't live with it, can't live without it, just my honest opinion.

 

[NIBOR0]

Did you know that SNAP doesn't count medicare part B premiums as an expense?

 

[Justme]

Did you know that SNAP doesn't count medicare part B premiums as an expense?

It is unthinkable and unbelievable what our government is doing to the older generation; it seems as though they cannot wait to bury us. I know it is our fault, but until we were in our later employment years, we were led to believe that we could survive, but inflation and horrible financial leadership have sunk our ship. Snap should be an automatic benefit to the elderly.