Analysts predict a 2.8% increase in Social Security checks for 2026, but the rise may not be enough to offset the growing inflation, especially for seniors living on fixed incomes.
Rising Medicare Premiums Could Offset 2026 COLA Hike
The cost-of-living adjustment (COLA) for Social Security is expected to be 2.8% in 2026, according to analysts. However, this increase may not be sufficient to counter the rising inflation, MarketWatch reported.
Analyst Mary Johnson and the Senior Citizens League both anticipate the COLA to be 2.8% or 2.7%. This would result in an average monthly increase of $54.70, bringing the total monthly benefit to $2,009.70. However, this increase might not be enough to cover the rising costs, especially with higher Medicare premiums also expected in 2026.
"That's apt to look pretty underwhelming to most Social Security recipients," stated Johnson.
Analysts worry that the COLA increase could be negated by rising Medicare premiums in 2026. Medicare Part B, which covers doctor visits and outpatient hospital services, is typically deducted directly from Social Security benefits for most recipients. Premiums for Part D prescription drug plans are also projected to increase.
This increase may also be insufficient for individuals who rely exclusively on Social Security. According to the Senior Citizens League, an advocacy organization for older adults, as many as 39% of beneficiaries rely solely on Social Security for their income.
New Bill Seeks To Cut Social Security Taxes Forever
The potential increase in Social Security checks comes amid a period of rising inflation. A recent report by Goldman Sachs projected a 0.37% increase in the Consumer Price Index (CPI) for August, driven by rising costs in categories ranging from travel and energy to sectors impacted by new tariffs. This would correspond to a year-over-year rate of 2.9%.
Meanwhile, a new bill in Congress could permanently eliminate federal taxes on Social Security benefits. The You Earn It, You Keep It Act would also strengthen the program’s trust funds by requiring higher earners to contribute more.
Senior Poverty Rises, Yet Many Want Early Retirement
The U.S. Census Bureau reports that the poverty rate for older adults rose to 15% in 2024, up from 14.2% the previous year, marking the highest rate across all age groups.
Despite these potential changes, a recent survey revealed that many Americans believe they should be retiring earlier, not later. The full retirement age has increased, but the idea of working longer may go against what the average American wants. Whether for health, family, or other reasons, a recent survey reveals that many people prefer to retire sooner.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
