After delays due to the ongoing federal shutdown, today the Social Security Administration released next year’s cost of living increase.
COLA in 2026 will be 2.8%. This will add $56 to the average Social Security check, bringing the average monthly check to about $2,071. Many senior advocates are saying the increase does not enable seniors to keep pace with inflation, for a variety of reasons.
First, COLA is based on an index that does not sufficiently take health care expenses into account. Health care takes a big bite out of seniors’ pockets. According to KFF Health News, seniors on Medicare spend 13.6% of their income on health expenses, twice as much as younger groups. And the increases in the cost of health care greatly outpace the general inflation rate.
The second factor is Medicare premiums and deductibles, which will erode the cost of living increase significantly. It is projected that the premium for Medicare Part B, which covers outpatient care and doctor visits, will rise 12% in 2026, from an average of $185 to $206.50. Deductibles are also expected to rise 12%. According to an October 24 article in Forbes, a retiree who receives a monthly Social Security increase of $54 will likely be ahead by only $32.50 once Medicare deductions are factored in.
Social Security beneficiaries should be receiving notification of their new payments starting in December. The COLA goes into effect in January.
