STRETCH THE 2026 SOCIAL SECURITY COLA

The 2.8% increase in payments may not seem like much, but these steps will help your benefits go further.

- BY BETH BRAVERMAN

COUNTING on your annual inflation “raise” in Social Security benefits to help cover your rising expenses in 2026? You may find yourself frustrated as the new year unfolds.

Social Security’s annual cost-of-living adjustment (COLA) will be 2.8% in 2026, just a smidge higher than 2025's 2.5% increase, which was the lowest boost in benefits since 2021. The average monthly payment will rise by about $56, to an estimated $2,071, while the maximum that a recipient can take home at full retirement age is expected to hit $4,152 a month, up from $4,018 in 2025. The modest COLA is a positive sign that inflation, despite creeping up lately due partly to tariffs, still remains far below recent pandemic-era highs.

That good news may feel underwhelming, however, when you're at the checkout counter or paying your bills. Consumer prices have risen nearly 25% overall since 2020, and household staples such as eggs and beef have more than doubled in that period.

Adding to the sting for 2026: an expected 11.6% increase in Medicare premiums, which will raise monthly payments for coverage by $21.54 for the typical beneficiary, wiping out nearly 40% of the increase in Social Security benefits. And if you're among the 5 million high-income Medicare recipients who pay a premium surcharge known as the income-related monthly adjustment amount (IRMAA), your Social Security payments could actually go down next year after factoring in the Medicare price hike.

Retirees are feeling the pain. More than three-fourths of the respondents in a recent AARP poll said that a 3% COLA would not be enough to keep up with rising prices, while 72% said they'd need an adjustment of 5% or more to afford their living expenses.