Social Security checks could increase, but analysts warn it could be ‘pretty overwhelming’
Analysts predict that Social Security checks will increase by 2.8% in 2026, but this increase may not be enough to offset rising inflation, especially for seniors living on fixed incomes.
to gasoline
Seniors will see a 2.8% increase in their monthly Social Security checks in 2026, which will likely disappoint most Americans, according to a study by the nonprofit advocacy group AARP.
The 2.8% cost of living (COLA) increase means Social Security benefits will increase by about $56 per month starting in January, when the COLA begins, the Social Security Administration said. A letter will be mailed to beneficiaries in December informing them of the new monthly contents, the SSA said. Those who have personal items my Social Security accounts will now be able to view COLA notices online faster.
Annual COLAs are meant to help seniors keep up with inflation, but only 22% of Americans 50 and older agree that a COLA of about 3% is enough to keep up with price increases, and 77% disagree, a survey of 1,000 seniors conducted between Sept. 18 and 23 found. This opinion is consistent regardless of party affiliation, with 75% of Republicans, 82% of independents, and 79% of Democrats expressing opposition.
Mary Johnson, an independent Social Security and Medicare policy analyst, said next year, “Medicare premium increases alone could wipe out many seniors’ COLAs by 2026.”
How much will Medicare take in Social Security?
Medicare Part B premiums and some Part D drug plan premiums in 2026 could challenge the largest $21.60 increase in program history set in 2022. Part B premiums have not yet been released, but the Medicare Administrative Board estimates that the standard monthly premium for Part B will increase from $185 in 2025 to between $21.50 and $206.50 in 2026.
Part B covers outpatient care, physician services, durable medical equipment, and preventive services. Optional Part D covers prescription drugs.
The Centers for Medicare and Medicaid Services (CMS) is expected to release Medicare Part B costs in late November, the SSA said. SSA needs to know the premiums in order to accurately calculate and notify beneficiaries of their 2026 Social Security checks. Medicare Part B premiums are automatically deducted from most Social Security recipients’ monthly payments.
Meanwhile, some Part D plans will increase premiums by as much as $50 in 2026, the maximum allowed under the Part D Premium Stabilization Demonstration Program, according to KFF, a nonprofit, nonpartisan research group.
““Complicating the situation is that there are fewer independent Part D plans to choose from,” Johnson said, noting that the total number of prescription drug plans has been cut in half since 2024, KFF said.
As an example, Johnson said the current drug plan will cost $1,079, up from $395 this year. After looking around, she found that her cheapest option was a standalone Part D plan that covered two common generic drugs and would cost about $605, including premiums, if she switched. But her combined premiums and drug costs will continue to increase next year by $210, or 53%, over her current plan.
“Yes, we are far from a 2.8% increase in COLA,” Johnson said.
Is 2026 COLA larger than normal?
Next year’s 2.8% increase is below average. According to SSA, COLA growth has averaged 3.1% over the past 10 years, resulting in a COLA of 2.5% in 2025.
COLA in 2026 is already below the inflation rate. The annual inflation rate in September was 3.0%, according to the Bureau of Labor Statistics. This is higher than the Federal Reserve’s target of 2% and the long-term average of about 2.5%. Many economists expect inflation to exceed 3% next year, driven in part by President Donald Trump’s tariffs, and continue to outpace backward-looking COLAs, further straining seniors’ already limited budgets.
“Even if your income increases by a few percentage points, inflation still creeps up every year, working against you in the same way that compound interest works against you,” says Kim Scourer, a financial expert at World Financial Group. “When prices rise faster than benefits, the dollar slowly loses its power.”
What should cola be like?
When AARP asked survey participants what kind of COLA they needed to cover their daily living expenses, 72% of older Americans said 5% or more, and 26% said they needed an 8% increase to keep up with rising costs. The answers to this question were also consistent across party affiliations, the advocacy group said.
What will happen to the seniors?
Experts say many older people could fall into poverty if they are unable to keep up with increased spending.
“A few extra dollars[from a COLA]doesn’t provide true financial security,” said Ramsey Alwyn, president and CEO of the National Council on Aging, a nonprofit organization focused on aging Americans.
The Census Bureau reported in August that poverty among adults 65 and older increased in 2024 from the previous year. This was the only age group that saw an increase. Based on the most comprehensive measure of poverty, the poverty rate rose from 14.2% to 15%, the highest level among all age groups.
How is COLA calculated?
Each year, the Social Security Administration bases the COLA on the average annual increase in the Consumer Price Index for Urban Salary and Office Workers (CPI-W) from July through September.
The urban salaried index primarily reflects a broader index published monthly by the Department of Labor, but may vary slightly. Last month, the overall consumer price index increased by 3.0%, and the urban salaried index increased by 2.9%.
How many Americans receive Social Security?
More than 74.5 million people received Social Security benefits in August, according to the Social Security Administration. These beneficiaries include retired workers, disabled workers, survivors of deceased workers, and people receiving Supplemental Security Income.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
