Many retirees are struggling financially, and if they’re not prepared for this reality when it comes to Social Security, things could get even worse next year.
December Social Security payments, important dates, and updates
Here are important dates for December Social Security payments and the latest updates, including January’s 2.8% cost-of-living adjustment.
Social Security benefits are supposed to help older people make ends meet. Unfortunately, for many retirees, retirement checks from the government aren’t enough to provide the support they need.
In fact, a 2025 study released by the Federation for the Elderly found that 21.8 million seniors are struggling to survive on Social Security alone, and that two-thirds of all seniors surveyed are dissatisfied with their monthly Social Security payments.
Sadly, the situation is likely to get even worse next year, with a Social Security disaster looming for retirees who aren’t ready for it in 2026.
Retirees are struggling and are about to take a big hit.
Unfortunately, many retirees will encounter unpleasant events in the coming year that could threaten their financial security. This surprise is related to the Social Security Cost of Living Adjustment (COLA).
COLAs are supposed to help seniors keep up with inflation, but retirees are not convinced that this is actually happening. In fact, 94% of seniors surveyed by the National Federation of Senior Citizens said the 2.5% raise they will receive in 2025 is too low. and Even though COLAs were designed not to lose status, their advantage was that they could not maintain purchasing power.
For seniors who struggled with the 2.5% increase, the 2026 COLA appears to have improved at first glance. Retirees are scheduled to receive a 2.8% benefit increase in the new year, which is larger than the increase announced for 2025.
The problem is that there is a big pitfall. That can undermine retirement planning efforts for people who think they’ll get more money next year.
Specifically, the problem is that Medicare premiums have increased significantly, and Medicare premiums are eating up a significant portion of the hikes collected by retirees.
This unpleasant surprise can be a disaster for retirees on a tight budget
From 2024 to 2025, standard Medicare Part B premiums increased by about $10.30, jumping from $174.70 in 2024 to $185 in 2025.
But in 2026, Medicare premiums will rise even more significantly. Standard premium increases from $185 to $202.90. That’s a 9.7% increase, meaning retirees will pay $17.90 more per month next year.
If a senior collects $2,000 per month, which is pretty close to the average retiree benefit, a 2.8% increase of $56 per month would only net them $38.10 in additional benefits after the additional Medicare premiums are deducted from their check (which is usually automatic for people with insurance).
This actually means that retirees will have a hard time getting their checks. actually It will likely rise closer to the promised 2.8%.
Medicare premiums affect the amount of benefits retirees receive because most seniors enroll in Medicare when they turn 65, and premiums are usually deducted directly from their Social Security checks. $17.90 of the benefit increase disappears before the retiree gets the big payout, making it extremely difficult for people without large 401(k) or IRA funds to make ends meet.
According to the Seniors Federation, many older people already believe they are falling behind, with many reporting that they feel inflation is “much higher” than government estimates.
They’re probably right, too, because the formula used to calculate COLA is based on how much the prices of goods and services rise, which is meant to reflect the spending habits of urban wage earners and office workers. Unfortunately, some areas where older adults spend disproportionate amounts of money, such as health care and housing, are not given as much weight in this index.
All of this means that retirees who don’t understand the impact of Medicare premiums may be expecting their monthly Social Security checks to be larger. And if you haven’t already made a plan to reduce your budget or cover additional costs with your IRA or 401(k) while maintaining safe withdrawal rates, you could be in serious financial trouble in 2026 and beyond.
Retirees should not wait for this to happen. Now is the time to start planning for what your finances will look like next year.
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