An above‑average cost‑of‑living adjustment is coming, but retirees could still feel poorer once the dust settles. Retirees counting on their October 15 Social Security announcement may see a headline figure near a 2.6 %–2.7 % raise in 2026. Sounds encouraging, right? Unfortunately, a closer look shows many households will lose ground once inflation and Medicare premiums get their bite.
Why a higher 2026 Social Security COLA could still hurt retirees despite beating recent averages
The projected bump would mark the fifth straight year with at least a 2.5 % COLA, a run unseen since the late 1980s. Yet shelter and medical services—two categories seniors purchase most—are rising faster than the headline CPI‑W used to calculate the COLA. In fact, year‑over‑year shelter inflation recently hovered around 3.8 % while medical care services touched 3.4 %. When key expenses outpace benefit growth, purchasing power slips.
Wondering if your own grocery cart tells the same story? Many recipients say “yes,” pointing to thinner margins at the pharmacy and checkout line. Here, the key figures at a glance:
- Average retired‑worker benefit (May 2025): $2,000+ per month
- Estimated 2026 COLA: 2.6 %–2.7 %
- Expected monthly boost for retirees: $52–$54
- Share of seniors kept above poverty line by Social Security (2023): 16.3 million
Medicare Part B premium spike is positioned to absorb much of next year’s raise for millions
Here’s the second punch: the Medicare Trustees peg the 2026 Part B premium at about $206.20, an 11.5 % jump after two consecutive 5.9 % increases. Because Part B is typically deducted directly from benefits, many retirees will watch a big slice of their new COLA vanish before it reaches their bank accounts.
| 2025 | 2026 (projected) | Change | |
|---|---|---|---|
| Part B monthly premium | $185.60 | $206.20 | +11.5 % |
| Average retired‑worker COLA | 2.5 % | 2.6 %–2.7 % | — |
So, will the “raise” feel like a raise at all? For many, the honest answer is “not really.” Below, the steps retirees can take now to cushion the 2026 Social Security squeeze before announcements arrive:
- Review your Medicare options early. Compare Advantage and Medigap plans this fall; a different policy could blunt premium hikes.
- Revisit your budget categories. Housing and healthcare share outsized weight—small renegotiations on rent, utilities, or prescription plans add up quickly.
- Delay claiming if possible. Each month you wait before age 70 permanently increases your base benefit, amplifying every future COLA.
Consequently, while the 2026 adjustment may look historic on paper, the combination of sticky inflation and a steep Medicare premium likely leaves retirees in another lose‑lose scenario. Staying proactive—rather than waiting for the October bulletin—remains the best defense.