Millions of older Americans depend on Social Security as a major source of income, but rising inflation and higher Medicare costs continue to eat away at their monthly checks. Based on the latest inflation data, experts now expect Social Security recipients to see about a 2.8% cost-of-living adjustment (COLA) in 2026.
While this increase may sound helpful, most of it will likely be offset by higher Medicare premiums and health costs, leaving seniors with little extra money in hand.
How Much Could Social Security Rise in 2026?
According to analysts, a 2.8% COLA would mean an increase of just over $52 per month for the average Social Security check. The average monthly benefit in August 2025 was $1,864.87, so the raise would lift it only slightly above $1,916.
Mary Johnson, an independent Social Security and Medicare policy analyst, explained that while this reflects current inflation, it doesn’t truly keep pace with the real costs seniors face, especially when it comes to health care, food, and housing.
Medicare Premiums May Take Away Most of the Raise
The biggest concern for seniors is that Medicare costs will climb faster than their Social Security checks.
The Medicare Trustees project that the standard Part B premium will increase by $21.50 in 2026, reaching $206.50 a month. This would nearly wipe out the $52 average monthly COLA increase.
This premium jump would be one of the largest in Medicare history, close to the record $21.60 increase in 2022.
Part D prescription drug plan premiums are also expected to rise. A new policy allows premiums to go up by as much as $50 per month, compared to $35 in 2025. With more than 33 million people enrolled in these plans, the higher costs could hit many seniors hard.
Poverty Among Seniors on the Rise
A recent Census Bureau report revealed that poverty among adults 65 and older rose in 2024, making them the only age group to see an increase. The senior poverty rate climbed from 14.2% to 15%, adding nearly one million more older Americans to the poverty rolls.
Claire Casey, president of the AARP Foundation, noted that this trend highlights how many seniors are struggling to cover basic needs despite Social Security and Medicare.
How Is COLA Calculated?
Each year, the Social Security Administration sets the COLA by measuring inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The average increase in CPI-W between July and September determines the COLA for the following year.
For August 2025, the overall inflation rate was 2.9%, while the CPI-W rose 2.8%. These numbers pushed the COLA estimate slightly higher than last month’s forecast.
A Look Back at Past COLAs
2024 COLA: 3.2% increase
2025 COLA: 2.5% increase, the smallest rise since 2021
2026 COLA (expected): 2.8% increase
How Many Americans Rely on Social Security?
As of August 2025, more than 74.5 million people received Social Security benefits. This group includes retired workers, disabled individuals, survivors of deceased workers, and those on Supplemental Security Income (SSI).
While a 2.8% increase in Social Security benefits may sound like good news, most seniors are unlikely to feel the difference once Medicare premiums and drug costs are deducted. With rising poverty rates among older Americans, the challenge of aging with financial security is becoming more serious.
The upcoming October announcement from the Social Security Administration will confirm the exact 2026 COLA, but for many seniors, the reality remains the same: their benefits often don’t stretch far enough to cover rising living costs.
