Starting in January, the government will increase costs for Social Security benefits in 2026. While it means seniors will essentially get a raise, many believe it’s not enough to keep up with inflation — especially considering the rising cost of Medicare premiums. Here’s what you need to know about the 2026 Social Security COLA increase.
2026 Social Security COLA Overview
The Cost-of-Living Adjustment (COLA) is a permanent increase to Social Security benefits. It’s designed to help retired seniors maintain their purchasing power as the cost of goods and services rise.
The government has decided to increase costs for Social Security benefits in 2026 by 2.8% starting in January. For most people, this equals a raise of about $56 per month.
With a record 8.7% increase in 2023 and a 3.2% adjustment in 2024, the 2026 Social Security COLA is one of the smallest increases in recent history.
However, these percentages aren’t just made up out of thin air. COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July through September each year. It also tracks inflation data, but the CPI-W is mostly focused on working-class spending patterns.
Public Reaction to Increase Costs for Social Security Benefits in 2026
While any additional money is good, many are worried that it’s not enough to keep up with inflation and the rising cost of goods and services. According to a survey from AARP, 77% of Americans aged 50+ across all political affiliations believe a 3% COLA does not keep up with inflation.
The 2026 Social Security COLA is below the 10-year average increase (3.1%) and below the current inflation rate (3.0%). In addition, economists expect inflation to stay above 3% in 2026. This erodes seniors’ purchasing power even farther as benefits lag behind constant price increases.
A majority of seniors (72%) say a 5% or more COLA is needed to cover rising costs, while 26% believe an 8% increase is needed. Poverty among adults 65+ rose from 14.2% to 15% in 2024, which is the highest increase of any age group.
Medicare’s Impact on 2026 Social Security COLA
It may seem that the increase costs for Social Security benefits in 2026 will help put a few more dollars into seniors’ pockets, but rising Medicare premiums may absorb most or all of the 2026 Social Security COLA increase.
Projected 2026 Medicare Part B premiums are expected to rise by an average of $21.50 per month — to $206.50 from $185 in 2025. This increase would nearly match the largest increase in history, which happened in 2022.
Part D drug plans are also expected to rise by up to $50 per month under the Premium Destabilization Demonstration Program. One plan increased from $395 to an incredible $1,076! Even when switching to a cheaper option, premiums still rose to $605 (53% higher).
With the cost of everything increasing, a 2.8% increase costs for social security benefits in 2026 may not be enough for many seniors, especially those who rely on Medicare for their healthcare services.
If you or someone you know needs assistance choosing an affordable healthcare plan, please contact us at Health Benefits Associates. Our local advisors can walk you through your options to choose a plan that works for your budget and needs. Call us today at 775-828-1216 to schedule an appointment.