2026 Social Security COLA Increase Partially Offset by Rising Medicare Part B Premiums
Social Security benefits increased by 2.8% in January 2026, but the gains are being significantly reduced by Medicare Part B premium increases to $202.90 monthly (up $17.90 from 2025). For the average retiree receiving a $56 monthly raise, nearly $18 is immediately reclaimed by Medicare, leaving a net gain of only $38 per month.
Source: Economic Times / SSA ·
Grace's Take
In 2026, Social Security benefits will go up by 2.8%, but you might not feel the full benefit because Medicare premiums are also rising, taking a chunk of that increase. As you're nearing retirement, it's important to plan for these healthcare costs, especially before you turn 65 and become eligible for Medicare. Don't worry—considering strategies to adjust your investments and timing your Social Security benefits can help you manage these expenses and keep your retirement dreams on track.
- •Medicare Part B premium increases directly reduce Social Security benefit gains
- •Real purchasing power for retirees remains constrained despite nominal COLA increases
- •Healthcare costs continue to outpace Social Security adjustments, eroding retirement income
Near-retirees should expect significantly smaller net income increases than headline COLA figures suggest. The $17.90 monthly Medicare premium increase substantially reduces the 2.8% COLA benefit. This reinforces the critical importance of having diversified income sources beyond Social Security alone, as healthcare costs will continue consuming a larger share of benefits.