As we age, surprises tend to become less welcome, especially when they involve finances. And for retirees, the year 2026 may bring some unexpected developments related to Social Security—one of which could be particularly unpleasant. Here’s what you should expect, and how to prepare.
The Predictable Surprise: Social Security COLA
The most predictable surprise is the 2026 Social Security Cost-of-Living Adjustment (COLA). While retirees will have to wait until mid-October 2025 for the official announcement, The Senior Citizens League (TSCL) has provided a reliable projection. According to their statistical model, the COLA for 2026 will likely be 2.7%.
Though the official COLA could shift slightly once the September 2025 inflation data is incorporated, it’s safe to assume the actual increase will be very close to this estimate. For retirees already dependent on Social Security, any increase is welcomed, but the reality is that this increase might not go as far as many hope.
The Unpleasant Surprise: Rising Medicare Part B Premiums
While a 2.7% COLA would boost the average monthly Social Security payment by about $54.18, retirees should brace for a potentially unpleasant surprise in the form of higher Medicare Part B premiums.
The Medicare Trustees have projected that premiums for Medicare Part B could jump by 11.6% in 2026, which is nearly double the increase in 2025. On average, this means $21.50 more per month in premiums—the largest increase since 2022.
For those receiving the average Social Security benefit of $2,006.69 in July 2025, this could mean losing about 40% of the COLA increase to Medicare premiums. This could come as a shock to many retirees who expect to pocket the full Social Security increase.
How Retirees Can Prepare
Although you can’t directly control Medicare Part B premium increases, there are a few steps retirees can take to minimize the impact on their finances:
- Consider Medicare Advantage Plans: If you’re on traditional Medicare, you might want to explore Medicare Advantage plans. While these plans won’t stop the rise in Part B premiums, they often have lower deductibles and out-of-pocket maximums, which could save you money overall.
- Look Into Medicare Savings Programs (MSPs): If your income is limited, you may qualify for Medicare Savings Programs, which are available in all states. These programs can help cover Part B premiums, deductibles, and coinsurance, giving you some financial relief.
- Appeal IRMAA Surcharges: If your income is higher than average, you may be subject to income-related monthly adjustment amounts (IRMAA), which raise your Medicare Part B premiums.
You can appeal these surcharges if you’ve experienced a major life event (such as divorce, job loss, or the death of a spouse). In these cases, the SSA may reduce your IRMAA based on your modified adjusted gross income (MAGI).
The $23,760 Social Security Bonus Many Retirees Overlook
While you may not be able to avoid the higher Medicare premiums, there are little-known Social Security strategies that could help boost your retirement income. For instance, many retirees don’t realize they can receive a Social Security bonus worth up to $23,760 by optimizing their claiming strategies.
Taking advantage of these strategies could help offset some of the financial strain caused by rising premiums or other unexpected costs in retirement.
The 2026 Social Security COLA is expected to be 2.7%, but for many retirees, this increase may be partially offset by rising Medicare Part B premiums. While these changes are somewhat predictable, the combination of higher premiums and a moderate COLA increase could be an unwelcome surprise for those who aren’t prepared.
By exploring Medicare Advantage plans, Medicare Savings Programs, or appealing IRMAA surcharges, retirees can take steps to reduce the financial impact and ensure their Social Security benefits work as hard as possible to maintain their standard of living.
