The Boomer Guide
Category: Social Security • Reading time: 6–8 minutes • By Mark Stiles

COLA 2026: What to Watch and What It Could Mean for Your Monthly Check

In plain English: The 2026 Social Security cost-of-living adjustment (COLA) is 2.8%. That means most people will see a bigger benefit payment starting in January 2026 — but what you keep can depend on Medicare premiums and taxes.

Quick takeaway: COLA helps benefits keep pace with inflation, but it’s not a “raise.” Your budget still needs a plan.

What COLA actually is (and what it isn’t)

COLA stands for Cost-of-Living Adjustment. Social Security uses it to adjust benefits when prices rise over time. It’s not tied to how the stock market did, who is in office, or what you personally spend money on. It’s a formula in the law.

Here’s the key point: Social Security calculates COLA using the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), published by the Bureau of Labor Statistics.

How the 2026 COLA was calculated

COLA is based on the change in CPI-W from one year’s third quarter (July–September) to the next year’s third quarter. If the CPI-W average is higher, benefits go up by that percentage.

For 2026, that year-to-year change results in a 2.8% adjustment.

What to watch (the three “quiet drivers”)

Even after COLA is set, it’s worth understanding what can push your monthly “real” benefit up or down. These are the drivers that usually matter most:

  • Medicare Part B premiums (often deducted directly from Social Security)
  • Taxes on Social Security income (depending on your total household income)
  • Inflation trends (especially on essentials like food, utilities, and medical costs)

Will you actually feel the increase?

Here’s the honest answer: it depends. You’ll see your benefit amount rise — but two common items can reduce what ends up in your checking account:

  • Medicare Part B premiums (if they rise, they can eat into the COLA boost)
  • Taxes (COLA can nudge some households into higher taxable Social Security ranges)

That’s why some people say, “My COLA went up, but my deposit didn’t feel that different.” It isn’t your imagination — it’s the math of deductions.

COLA and Medicare: the part people miss

Many beneficiaries have Medicare premiums deducted right from their Social Security payment. When Part B premiums rise, they can reduce the practical benefit of COLA.

There’s also a rule called the “hold harmless” provision that can protect some people from having their net Social Security check go down due to Part B premium increases — though it doesn’t apply to everyone.

A quick “real life” way to use this

  • Don’t spend the COLA before you see it. Wait until January deposits hit.
  • Check your Medicare deduction. That’s often the first place the increase gets reduced.
  • Give yourself a one-page budget refresh. Aim to direct the increase to essentials or savings before lifestyle upgrades.

Bottom line

COLA is meant to keep benefits from falling behind inflation — and a 2.8% adjustment helps. But the amount you feel depends on Medicare premiums, taxes, and what costs are rising in your real household budget.

If you want to stay ahead of the “quiet drivers,” treat COLA as a planning moment, not a spending moment.

← Back to the Blog ← The Boomer Guide Home