COLA for Social Security beneficiaries is projected to increase by 2.7% in 2026, slightly higher than the 2.5% adjustment received in 2025. This anticipated boost would add approximately $54 to the average monthly benefit, raising it from $2,008 to $2,062 for the nearly 68 million Americans who depend on these payments. Although many seniors look forward to this extra income, there’s more to the story than just the headline percentage.

While the social security increase for 2026 initially seems promising, we need to consider several hidden factors that could significantly impact its value. For instance, the standard Medicare Part B premium, which increased to $185 in 2025, is expected to jump to approximately $206.50 per month in 2026. Consequently, this premium hike could consume nearly 40% of the COLA increase, substantially reducing the actual benefit retirees receive. The final 2026 social security COLA increase will be officially announced on October 15, 2025, following the release of the September 2025 inflation data.

SSA projects 2.7% COLA increase for 2026

The Social Security Administration (SSA) will not reveal the official 2026 Cost-of-Living Adjustment until October 15, 2025. Nevertheless, several credible forecasts point toward a 2.7% increase. This projected figure comes from The Senior Citizens League (TSCL), a nonpartisan advocacy group whose previous predictions have proven accurate, including their correct forecast of the 2.5% adjustment for 2025.

Based on current calculations, this anticipated bump would increase the average retiree’s monthly check from approximately $2,008 to $2,062. In real terms, most beneficiaries would see about $54 more per month starting January 2026. For survivors collecting an average of $1,575 monthly, the adjustment would add roughly $43 to their payments.

Independent analyst Mary Johnson offers a slightly more optimistic projection of 2.8%, which would boost the average benefit by about $56 monthly. Her assessment suggests September’s inflation data would need to show virtually no growth for the lower 2.7% estimate to materialize.

The TSCL’s 2025 Senior Survey revealed widespread dissatisfaction with recent adjustments—94% of respondents believed the 2025 COLA of 2.5% was insufficient. Furthermore, 80% of seniors reported experiencing inflation rates of 3% or higher based on their personal expenses.

The final calculation relies on comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July-September 2025 with the same period from the previous year. This methodology has determined Social Security benefit increases since 1975.

Medicare premium hikes may offset COLA gains

Medicare costs will take a much larger bite out of Social Security benefits in 2026. The standard Part B premium is expected to jump by 11.6% to $206.50 per month, up from $185.00 in 2025. This $21.50 increase represents the largest dollar rise in Part B premiums since 2022.

Additionally, the Part B annual deductible is projected to climb 12% to $288.00, a $31.00 increase over the 2025 amount. Part D prescription drug coverage will also become more expensive, with the base beneficiary premium estimated to rise 6% to $38.99.

Despite the cola for social security being projected at 2.7%, these Medicare increases will substantially diminish the actual benefit. According to calculations:

• Average monthly COLA increase: +$54.18
• 2026 Part B premium increase: -$21.50
• Net gain for most retirees: +$32.68 per month

In effect, almost 40% of the anticipated COLA will be consumed by Medicare Part B premiums alone. This situation creates a “double whammy” for beneficiaries, as their expected raise gets significantly reduced before reaching their bank accounts.

The government does maintain a “hold harmless” policy preventing Medicare premium increases from reducing monthly Social Security payments for those with smaller benefits. However, most beneficiaries will still feel the financial squeeze as rising medical costs outpace their cost-of-living adjustments.

Rising costs outpace COLA adjustments

Despite annual adjustments, evidence reveals a troubling disconnect between social security increases and retirees’ actual expenses. Studies show that between 2010 and 2024, cola for social security benefits increased by 58% while seniors’ expenses rose by 73%. This widening gap means retirees face an ongoing erosion of their purchasing power.

The problem largely stems from the calculation method. The CPI-W tracks spending patterns of urban wage earners rather than retirees, failing to accurately capture senior-specific expenses. In fact, The Senior Citizens League reports that Social Security has lost 40% of its buying power since 2000.

Essential expenses for seniors have consistently outpaced official inflation metrics. For instance:

• Healthcare costs consume nearly 25% of average monthly Social Security benefits
• A 65-year-old retiring in 2025 can expect lifetime healthcare expenses of approximately $172,500
• Housing and food costs have risen faster than COLA adjustments

Moreover, 80% of seniors perceive their personal inflation rate above 3%, far exceeding recent COLA figures. Many advocacy groups support adopting the Consumer Price Index for the Elderly (CPI-E), which better reflects seniors’ spending patterns by giving more weight to healthcare and housing costs. Historical analysis shows a CPI-E-based formula would have provided higher adjustments in most years.