The 2026 COLA is projected at 2.7% to 2.8%, which for the average retiree translates to about $54 more per month. That sounds encouraging, especially after years of inflation eating into fixed incomes. Over a full year, this adds up to roughly $650 extra, giving retirees a modest boost to help cover rising costs.

But there’s a catch. Medicare Part B premiums are expected to jump to around $206.50 per month, up from about $185 this year. Because these premiums are automatically deducted from Social Security checks, much of the “raise” disappears before retirees can spend it. After accounting for this, the real gain may shrink to only $30–$35 per month.

Healthcare isn’t the only pressure. Everyday expenses like groceries, housing, and utilities continue to rise, often faster than the COLA itself. Seniors spend a larger share of their income on these essentials than younger households, meaning the official inflation adjustment doesn’t fully reflect the true cost of living for older Americans.

Other changes in 2026 could further impact retirees. The full retirement age is gradually increasing, reaching 66 years and 10 months for people born in 1959 and 67 for those born in 1960 or later.

Additionally, the taxable wage base and earnings limits for those still working will rise, affecting some higher-income seniors. Combined with rising healthcare costs, these adjustments mean that while Social Security technically increases, many retirees will feel little improvement in their overall financial situation.

How much is the 2026 COLA expected to be?

The latest estimates suggest the COLA for 2026 will land in the range of 2.7% to 2.8%. That number is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which compares inflation in the third quarter of one year to the third quarter of the previous year.

For the average retiree who currently receives about $2,008 per month, this adjustment works out to an increase of roughly $54 each month. Over a year, that totals a little more than $650 in additional benefits.

On paper, that looks like a solid boost. But many seniors already know from experience that these raises rarely stretch as far as they hope. Why? Because the costs retirees face every day don’t always match the way the COLA is calculated.

Why won’t retirees feel the full benefit?

The first and biggest reason is Medicare. Standard Medicare Part B premiums are projected to rise to about $206.50 per month in 2026, up from roughly $185 this year. That’s an increase of more than $20 each month. Since these premiums are automatically deducted from Social Security checks, retirees will never see that portion of their COLA in their bank accounts.

To put it in perspective: the average retiree may gain $54 from the COLA, but about $21 of that will immediately be swallowed by Medicare Part B. That leaves closer to $33 extra per month.

And Medicare isn’t the only cost climbing. Prescription drug coverage under Part D, supplemental insurance, and out-of-pocket health expenses are all projected to rise. Add those increases together, and the “raise” starts to look more like a way of treading water.

What about inflation on everyday essentials?

Beyond health care, inflation is still taking a heavy toll on seniors. Housing costs remain high, with rents in many areas up by double digits over the past few years. Utilities such as electricity and natural gas have seen steady price increases. Groceries continue to cost more than they did just a year or two ago, especially staples like bread, milk, and fresh produce.

This is where the COLA calculation misses the mark. The CPI-W is based on the spending patterns of working households, not retired ones. Retirees spend a far larger share of their income on health care and housing, both of which have been rising faster than overall inflation. That means the COLA, while helpful, doesn’t fully reflect the reality of senior living expenses.

Are other changes coming in 2026?

Yes. Alongside the COLA adjustment, several structural shifts in Social Security will also take effect.

• End of paper checks: The Social Security Administration plans to phase out paper check distributions entirely. Retirees must now rely on electronic payments, which could be challenging for those without reliable online banking.
• Full Retirement Age (FRA): For people born in 1959, the FRA will move to 66 years and 10 months. Anyone born in 1960 or later will see their FRA rise to 67 years. This means younger retirees who claim early will face larger permanent benefit reductions.
• Taxable wage base: The maximum amount of earnings subject to Social Security taxes will increase again in 2026, affecting higher-income workers still contributing to the system.
• Earnings test limits: For those who claim benefits while still working, the income threshold before benefits are temporarily withheld will also rise slightly.

These adjustments matter, especially for those on the edge of retirement who are trying to maximize lifetime benefits.

What does this mean for retirees’ bottom line?

When all factors are added up, the average retiree’s check may rise by about $650 a year before deductions. But after accounting for Medicare premiums and other health-related costs, that increase could shrink to around $350 to $400 annually. Spread across 12 months, that’s just $30 to $35 extra per month—barely enough to cover a couple of trips to the grocery store.

The story here is not that Social Security isn’t keeping up with inflation. It technically is, according to the law. The deeper issue is that the measure used for inflation doesn’t match the spending realities of older Americans. Seniors are often caught in a cycle where each year’s COLA looks decent on paper but doesn’t translate into real relief.