Nearly 71 million Social Security beneficiaries will receive a 2.8 percent cost-of-living adjustment in 2026, adding roughly $56 per month to their average checks, the Social Security Administration announced in October 2025. The increase marks a slight uptick from the 2.5 percent COLA for 2025, reflecting moderating inflation over recent months.
While the 2.8 percent increase appears modest, its purchasing power will be significantly offset by rising Medicare costs. The standard Medicare Part B premium, which covers outpatient services like physician visits and diagnostic tests, is jumping to $202.90 per month in 2026, up $17.90 from $185 in 2025—a 9.7 percent increase. This means the Medicare premium alone will consume more than one-quarter of the average Social Security COLA gain, according to analysis from the Center for Retirement Research at Boston College.
The Medicare Part B premium increase reflects rising costs of outpatient services and higher use of medical products, according to the Centers for Medicare & Medicaid Services. The premium is set to cover 25 percent of estimated total Medicare Part B outlays. Part B premiums as a share of annual Social Security benefits for workers with average pre-retirement earnings will reach an all-time high of 9.4 percent in 2026, the Center for Retirement Research found.
Income affects the final premium amount. For 2026, beneficiaries with annual household income of $109,000 or less will pay the standard $202.90 monthly premium. Those with higher incomes face income-related surcharges, with the highest tier at $689.90 per month for individuals earning $500,000 or more, or married couples filing jointly with $750,000 or more in income.
The squeeze on retiree finances extends beyond Part B. Medicare Part A, covering inpatient hospital care, carries a $1,736 deductible in 2026. Part D, which covers prescription drugs, adds another premium that varies by plan, plus an income-related adjustment deducted directly from Social Security benefits. Dental, vision, hearing, and long-term care remain uncovered by Medicare entirely, forcing many retirees to purchase supplemental insurance or manage significant out-of-pocket costs.
The tension between Social Security increases and healthcare costs has grown sharper over the past decade. In 2018, Part B premiums consumed 8.3 percent of the average Social Security benefit; by 2026, that share rises to 9.4 percent. Research from the Center for Retirement Research suggests that after accounting for out-of-pocket medical spending, the median beneficiary retains 71 percent of their Social Security income for non-medical expenses. For those in the bottom 25 percent of Social Security earners, only 52 percent remains after medical costs.
Sources
- Social Security Administration — announced 2.8 percent COLA for 2026, benefiting nearly 71 million recipients, with average monthly increase of $56
- Centers for Medicare & Medicaid Services — announced Part B premium of $202.90 for 2026, a $17.90 increase (9.7 percent), effective November 2025
- Center for Retirement Research at Boston College — analysis showing Medicare premiums will consume more than 25 percent of the 2.8 percent Social Security COLA, and Part B premiums reaching 9.4 percent of average benefit
- Medicare Rights Center — confirmed average Social Security benefit of $2,008.31 in July 2025 growing by $56 with 2026 COLA
- CNBC — reported 2.8 percent increase translating to approximately $56 monthly on average retirement benefits
