When the Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026, the headlines suggested retirees could expect a welcome boost to their monthly checks. The average retired worker would see an increase of about $56 per month, bringing payments from $2,015 to $2,071.

But for the 75 million Americans who depend on these benefits, the real-world impact will be considerably less generous. Here's why—and what you can do about it.

The Medicare Offset Nobody Talks About

The standard Medicare Part B premium will jump to $202.90 per month in 2026—an increase of $17.90, or 9.68%, from the current $185.00. For most beneficiaries, this premium is deducted directly from their Social Security checks before they ever see the money.

That means of the average $56 monthly COLA increase, $17.90 will immediately go to cover higher Medicare costs, leaving a net gain of just $38.10—a real increase of only about 1.9%.

And that's for beneficiaries who pay only the standard Part B premium. Those in higher income brackets face even steeper Medicare surcharges through the Income-Related Monthly Adjustment Amount (IRMAA), potentially wiping out their entire COLA or more.

The Math That Matters

Here's how the numbers actually work out for typical beneficiaries:

  • Gross COLA increase: $56 per month (2.8%)
  • Medicare Part B increase: $17.90 per month
  • Net monthly gain: $38.10
  • Effective raise: 1.89%

For married couples collecting Social Security, the story is similar. The average couple will receive a gross increase of $88, but after accounting for two Medicare Part B premiums rising by $35.80 combined, the net gain falls to just $52.20.

A Historical Perspective

This dynamic—where Medicare premium increases erode COLA gains—has become an unfortunate pattern. Over the past 20 years, the Social Security COLA has averaged just 2.6%, according to The Senior Citizens League, while Medicare costs have frequently risen faster.

The 2.8% adjustment for 2026 is slightly above that historical average and a modest improvement over the 2.5% increase beneficiaries received in 2025. But with inflation still running above the Federal Reserve's 2% target and healthcare costs continuing to climb, many retirees find their purchasing power gradually declining despite annual adjustments.

When Your Check Arrives

For the nearly 71 million Social Security beneficiaries, payments reflecting the 2026 COLA will arrive in January according to the following schedule based on birth date:

  • Born 1st–10th: January 14, 2026
  • Born 11th–20th: January 21, 2026
  • Born 21st–31st: January 28, 2026

Supplemental Security Income (SSI) recipients—nearly 7.5 million Americans—will see their increased payments beginning December 31, 2025, slightly ahead of the calendar year.

Other 2026 Changes to Know

Beyond the COLA, several other Social Security parameters are adjusting for the new year:

  • Maximum taxable earnings: Rising to $184,500, meaning higher earners will pay Social Security taxes on more of their income
  • Earnings credit threshold: You'll need wages or self-employment income of $1,890 to earn one credit in 2026
  • Earnings test limit: If you claim benefits early while still working, the SSA will temporarily withhold $1 for every $2 earned over $24,480 (or $2,040 per month)

What Retirees Can Do

While you can't avoid the Medicare Part B premium increase, there are strategies to maximize your Social Security benefits:

Review Your Medicare Options

Open enrollment for Medicare Advantage and Part D prescription drug plans runs through December 7 each year. Shopping for more cost-effective plans could offset some of the premium increases.

Consider Income Management

If you're approaching IRMAA thresholds, strategic Roth conversions, capital gain harvesting, or other income management techniques could help you avoid higher Medicare surcharges in future years.

Plan for the Long Term

With COLAs consistently lagging true increases in living costs—especially for healthcare and housing—building additional savings or reducing fixed expenses can provide crucial breathing room in retirement budgets.

The 2.8% headline number may sound reassuring, but informed beneficiaries know to look beyond the announcement to understand what their checks will actually deliver. For most, the real raise will be far more modest than the press releases suggest.