Key Highlights
- Social Security beneficiaries will receive a 2.8% cost-of-living adjustment (COLA) in 2026.
- The increase is below historical averages and not sufficient to keep up with inflation, experts say.
- Rising Medicare premiums may consume the COLA for many seniors next year.
- Many seniors may fall into poverty if they cannot afford rising expenses despite the COLA.
The 2.8% Social Security COLA: Not Enough to Keep Up with Inflation
Social Security beneficiaries will receive a 2.8% cost-of-living adjustment (COLA) in 2026, according to the Social Security Administration (SSA). This percentage is below historical averages and may disappoint many Americans who rely on these benefits for financial security.
The COLA increase means beneficiaries will see an average rise of about $56 per month starting from January. SSA will mail letters in December notifying recipients of their new monthly benefit amount, with those having personal my Social Security accounts able to view the information earlier online.
Historical Context and Inflation Concerns
The 2.8% COLA is below historical averages over the past decade, which have averaged 3.1%. The COLA for 2025 was only 2.5%, further showing the trend of lower adjustments. Moreover, the COLA does not match current inflation rates; in September 2025, annual inflation stood at 3.0%.
The Federal Reserve targets an average inflation rate of 2%, and many economists predict higher inflation next year due to President Donald Trump’s tariffs. This means that even a small COLA increase is likely not enough for seniors to keep up with rising costs.
Rising Medicare Premiums Will Challenge the COLA
Medicare Part B premiums may rise significantly in 2026, challenging the value of the COLA. The SSA expects the standard monthly Part B premium to increase by $21.50, from $185 in 2025 to $206.50 in 2026. Medicare Trustees have estimated this rise.
Some Part D drug plan premiums are also increasing, with some plans raising premiums by as much as $50.
This increase is part of a Part D Premium Stabilization Demonstration Program, which allows for maximum increases. Additionally, the number of stand-alone Part D plans has dropped by half since 2024, making it harder for seniors to find affordable options.
For example, Mary Johnson, an independent Social Security and Medicare policy analyst, shares her experience. She states that switching from her current plan would result in a total premium and drug cost increase of $210, representing a 53% hike next year compared to this year’s costs.
Impact on Seniors’ Financial Security
The COLA may not be enough for seniors to maintain their financial stability. AARP survey results indicate that only 22% of Americans aged 50 and above agree that a COLA around 3% is sufficient to keep up with rising prices, while the majority disagree.
Experts predict that many seniors may fall into poverty if they cannot afford their rising expenses. According to the Census Bureau, poverty among adults at least 65 years old increased from 14.2% in 2024 to 15% in 2025, making it the only age group with an increase.
Ramsey Alwin, president and CEO of the National Council on Aging, warns that a few extra dollars from the COLA will not provide financial security.
He notes, “Even if your income goes up a few percent, inflation compounds quietly every year – working against you the same way compound interest works for you.” This sentiment is echoed by other experts who argue that a higher COLA, possibly around 5%, or even an 8% increase, would be necessary to keep pace with rising costs.
The Social Security Administration calculates COLA based on average annual increases in the consumer price index for urban wage earners and clerical workers from July through September. The index reflects the broader Labor Department releases each month but may sometimes differ slightly.
