The Social Security Cost-of-Living Adjustment (COLA) for 2026 is expected to be 2.7%, slightly higher than the 2.5% increase seen this year.
While any increase provides hope, experts warn that it may fall short of protecting retirees from mounting financial strain, especially as living costs, particularly health care, continue to rise faster than benefits.
Health expenses are devouring retirement support
Medicare Part B premiums are expected to rise by 11.6% next year, accounting for the majority or all of the projected COLA increase.
These premiums are automatically deducted from Social Security checks, so many retirees may see no increase in take-home pay at all.
Between 2010 and 2024, COLAs increased Social Security benefits by 58%, while inflation increased seniors’ overall expenses by 73%.
That widening gap highlights a stark reality: cost-of-living adjustments alone are insufficient.
Many Medicare beneficiaries already pay more than 10% of their income for Part B premiums. Remove out-of-pocket costs for dental, vision, and long-term care that are not covered by Medicare, and the 2.7% increase appears to be more symbolic than beneficial.
According to a nationwide survey, nearly one-third of Social Security recipients are forced to reduce their spending on necessities such as groceries and medications. This desperation reflects a larger systemic issue: retirees cannot continue to bear rising costs.
When increases are insufficient, what should retirees do?
The average 65-year-old is expected to spend $172,500 on health care over their lifetime, with Medicare Part B and D premiums accounting for nearly half of that total.
And the future appears uncertain; the Social Security and Medicare trust funds are now expected to deplete in 2034 and 2033, respectively.
Finally, this 2026 COLA represents a lose-lose scenario: a small cushion that may vanish before beneficiaries notice it, and none of it guarantees coverage against rising health-care costs.
What retirees can do now:
Reassess budgets and emergency reserves to account for fixed health costs.
Expand retirement savings strategies–maximize 401(k)s, IRAs, or HSA contributions if eligible.
Plan for medical inflation, not just standard living inflation.
As this “raise” arrives, the real question remains: how many retirees will feel its benefits–and whether policymakers can make the next COLA truly meaningful.
