The United States Social Security Administration (SSA) announced last October a 2.8% cost-of-living adjustment (COLA) for the upcoming year 2026. This should provide relief for retirees whose only income is Social Security, but the truth is that the increase may not be enough. This is not only because the prices of food, utilities, housing, and transportation continue to rise due to inflation, but also because, for the next year, Medicare Part B will also experience significant increases, going from $185 to $202.90 per month.
Therefore, the COLA increase would be completely absorbed, especially for those who rely solely on Social Security, those with chronic health problems, or those with low incomes. For this reason, experts recommend that retirees take measures for 2026, such as reviewing their monthly budget or, if possible, considering a part-time job to increase their income.
COLA Increase for 2026
Last October, the United States Social Security Administration announced, more than a week later than the scheduled date, the new Cost of Living Adjustment (COLA) percentage for 2026. The new percentage is 2.8%, which translates to an extra $65 per month ($672 per year) for the average retired worker. Although this figure should provide some relief, the truth is that it was hardly noticeable, especially for those retirees who rely solely on Social Security as a source of income. In theory, the COLA is meant to ease the pressure of inflation, but currently, it is not keeping up with the pace at which prices are rising.
Medicare Part B
Aside from the problem posed by the rising costs due to inflation, another factor that worries retirees is the increase in Medicare Part B. It is expected that by 2026, the standard Part B premium will rise from $185 to $202.90 per month, which represents an increase of $17.90 that not all retirees can afford. It is worth mentioning that Part A has no premiums, so it remains the same as this year.
Who will be most affected
As expected, not all retirees will be affected in the same way, since one of the most important factors is having a high source of income or several. Those most exposed to these increases are:
- Older people whose only income comes from Social Security.
- Retirees with chronic health problems who require frequent care.
- Households in which Medicare already takes up a large portion of the income.
- Households with a low level of income.
What can be done about it?
Although nothing, we would like to find a solution to this situation. The truth is that retirees cannot do anything about inflation other than plan their expenses. Experts recommend that retirees, looking ahead to 2026, review their monthly income, seek ways to reduce recurring expenses, such as utilities, insurance, or housing costs, and even, if possible, consider part-time work to have a second source of income.
Frequently asked questions
What is the COLA increase for 2026?
The increase will be 2.8%, which amounts to about an extra $65 per month for the average retiree.
How much will Medicare Part B rise?
The monthly premium will go from $185 to $202.90, an increase of $17.90 that will lessen the real impact of the COLA increase.
Who is most affected by these changes?
Mainly those who rely solely on Social Security, people with chronic illnesses, and low-income households.