Social Security News: Historic COLA Increase Threatens 2026 Payments
Social security news today reveals that nearly 68 million Americans receive monthly Social Security benefits, with projections indicating a modest increase for 2026. Analysts expect a 2.7% Cost-of-Living Adjustment (COLA) for the coming year, which would raise the average benefit check by approximately $54 per month—from $2,008 to $2,062.
However, this anticipated increase might not translate to more money in recipients’ pockets. Although the 2.7% adjustment would provide some relief compared to previous years, Medicare Part B premiums are simultaneously expected to rise significantly in 2026 to $206.20 per month—an increase of more than 11%. Additionally, we must consider that the buying power of Social Security benefits has already fallen by 20% from 2010 to 2024, making this situation particularly concerning for the over 70 million Americans who received a Social Security payment in July.
SSA Announces Historic 2026 COLA Increase
The Social Security Administration (SSA) is expected to announce the 2026 Cost-of-Living Adjustment (COLA) on October 15, 2025. Based on current economic indicators, the projected increase stands at 2.7%, slightly higher than the 2.5% adjustment beneficiaries received in 2025.
This anticipated adjustment would translate to approximately $54 per month for the average retired worker, increasing the typical monthly benefit from $2,008 to around $2,062. For a retired couple both receiving benefits, this represents a potential monthly increase of $108.36.
Furthermore, the 2026 adjustment marks a significant milestone in Social Security history. If forecasts prove accurate, it would be the fifth consecutive year with a COLA of at least 2.5%. Moreover, this would bring the average COLA over the last five years to 4.6% – a phenomenon not seen for four decades since 1986.
According to established protocol, the SSA calculates these adjustments based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), specifically comparing the third quarter (July-September) data with the same period from the previous year.
Some analysts, including Mary Johnson, an independent Social Security policy analyst, predict the COLA could reach 2.8%, depending on September’s inflation data. Despite these projections, many seniors express concern that these adjustments fail to adequately reflect their actual living cost increases.
Medicare Premiums Threaten to Offset Gains
Medicare Part B premiums are projected to rise dramatically in 2026, consequently diminishing the anticipated COLA benefits. The standard monthly premium is expected to increase from $185.00 to $206.50—an 11.6% jump. This represents the largest single-year increase since 2022.
For most beneficiaries, this substantial premium hike will consume a significant portion of their COLA raise. In fact, nearly 40% of the 2026 COLA will be absorbed by Medicare Part B premiums alone.
“If the COLA in 2026 is 2.7%, a Part B premium jump of $21.50 would take the entire COLA of beneficiaries who receive around $800.00 or less,” notes Johnson. This is especially concerning for individuals with smaller Social Security payments.
The annual Part B deductible is likewise expected to rise by 12%, from $257.00 to $288.00. Furthermore, the Part D deductible will increase from $590.00 to $615.00.
Nevertheless, some beneficiaries are protected by the “hold harmless” provision, which prevents Medicare premium increases from reducing monthly Social Security payments. To qualify, recipients must receive Social Security benefits for November and December of the current year and have Medicare premiums automatically deducted from those benefits.
Essentially, as healthcare costs continue rising, many retirees will see minimal actual growth in their Social Security checks, notably those with fixed incomes.
SSA Implements Broader Changes in 2026
Beyond the COLA adjustment, 2026 brings several other substantial changes to Social Security. First, the full retirement age (FRA) will reach its final increase to 67 years for individuals born in 1960 or later, completing the 42-year gradual shift that began with the 1983 amendments to the Social Security Act.
Concurrently, the maximum taxable earnings limit for Social Security contributions is projected to rise to $183,600, an increase of $7,500 from 2025. This change translates to an additional $465 annually in taxes for high earners, bringing their total contribution to $11,383.20.
Starting in 2026, beneficiaries working before reaching FRA will face an estimated annual earnings limit of $24,360, with $1 in benefits withheld for every $2 earned above this threshold. For those reaching FRA during 2026, the limit increases to $64,800, with $1 withheld for every $3 earned above the cap until they reach FRA. After reaching FRA, beneficiaries can earn unlimited income without benefit reductions.
Finally, effective September 30, 2025, the Social Security Administration will cease issuing paper checks. This transition affects approximately 500,000 recipients (0.8% of beneficiaries) who must switch to direct deposit or the Direct Express® card. This move aims to enhance security while reducing costs—each electronic payment saves about 35 cents compared to paper checks.