The Social Security cost-of-living adjustment (COLA) for 2026 is set at 2.8%, giving beneficiaries a modest increase in their monthly payments. However, experts warn that the benefit boost may feel smaller than expected due to rising Medicare Part B premiums, which could reduce overall take-home payments by as much as 10%. With nearly 70 million Americans relying on Social Security—mostly seniors over age 65—this change requires timely planning and financial adjustments before the end of the fiscal year on December 31, 2025.
2026 COLA Increase: What Beneficiaries Should Expect
The 2.8% COLA increase will officially apply to Social Security payments starting January 2026. While this adjustment is designed to help seniors keep pace with inflation, the projected rise in Medicare Part B premiums means many beneficiaries may see a reduced net gain.
The Department of Health and Human Services (HHS) estimates a 5% to 10% premium increase, which will directly affect net benefit deposits in early 2026. This makes it essential for beneficiaries to review their financial plans and update monthly budgets before the fiscal year closes.
Act Now: Calculate Your 2026 Social Security Benefits Before December 31
Step 1: Compute Your COLA-Adjusted Payment
Start by calculating your expected 2026 Social Security income:
Current monthly benefit × 1.028 = COLA-adjusted payment
After determining this number, deduct the estimated increase in Medicare Part B premiums to find your new net monthly benefit.
Step 2: Use SSA Tools for Accuracy
The SSA’s online calculators at ssa.gov let you estimate benefits using factors like income history, deductions, and health-related expenses. These tools help beneficiaries understand the real impact of the upcoming COLA and Medicare deductions.
Plan Smart: Build a Budget That Fits Your 2026 Net Income
Break Down Your Expenses
To prepare for the 2026 Social Security changes, create a budget that includes:
- Essential costs (food, utilities), which typically make up 50% of the average $1,900 monthly income for single retirees
- Annual expenses, such as insurance premiums
- An emergency fund, ideally covering three months of basic living costs
Since 40% of retirees rely entirely on Social Security, tracking monthly spending through budgeting apps or spreadsheets is more important than ever.
What to Do If Benefits Don’t Cover Your Expenses
If your projected Social Security payment falls short, consider these strategies:
1. Downsize to Reduce Costs
Moving to a smaller home can significantly reduce:
- Property taxes (national average: $2,500 per year)
- Utility bills, often cut by up to 30%
2. Generate Extra Income
- Renting out a spare room can provide an average of $500 per month, according to Airbnb data.
- Seniors who’ve reached full retirement age (67) can earn up to $22,320 annually in 2026 through part-time work—such as tutoring, rideshare driving, or delivery jobs—without penalty from the SSA.
Medicare Open Enrollment Ends December 7, 2025
The Medicare open enrollment period, ending December 7, allows beneficiaries to switch plans and save money before the new benefit year begins.
Part D Savings
Reviewing and switching to a more affordable Medicare Part D prescription plan can save up to $500 annually, based on Medicare.gov estimates.
Advantage Plans Can Reduce Costs
Many Medicare Advantage plans offer lower monthly premiums with comparable benefits. Since 50% of Medicare premiums are deducted automatically from Social Security checks, choosing the right plan is essential for maximizing your 2026 Social Security income despite rising healthcare costs.
Colorado’s new tax policy has sparked interest as residents learn why payments vary so widely under Colorado’s $2 Billion Refund Program: Why Payments Range From $177 to $1,130.The program distributes refunds based on income brackets, filing status, and individual tax liabilities, which is why some taxpayers receive the minimum $177 while others qualify for over $1,100. By returning excess state revenue directly to households, the initiative aims to ease financial pressure and ensure residents benefit from Colorado’s strong economic performance.
Conclusion
The 2026 Social Security COLA increase of 2.8% offers some relief, but rising Medicare Part B premiums may reduce overall net benefits. Beneficiaries must calculate their updated payments, adjust their budgets, and take advantage of Medicare’s open enrollment period before the end of 2025. Careful planning—whether through budgeting, choosing a better Medicare plan, downsizing, or generating supplemental income—can help seniors maintain financial stability in 2026.
FAQs
1. How much will Social Security benefits increase in 2026?
Social Security benefits will rise by 2.8% due to the 2026 COLA adjustment.
2. Will Medicare premiums reduce my Social Security increase?
Yes. Medicare Part B premiums are expected to rise 5–10%, which may offset part of the COLA increase.
3. When does Medicare open enrollment end for 2026 planning?
Medicare open enrollment ends December 7, 2025, giving beneficiaries time to switch plans and reduce costs.