AMAC Magazine Exclusive – By Gerry Hafer
The 2.8 percent Social Security cost-of-living adjustment was announced in late October, bringing with it a mixed reaction among America’s seniors. For the average beneficiary, the 2026 COLA adds about $56 to their monthly benefit amount beginning in January. For many, this brings some relief in the struggle to meet continually growing day-to-day living expenses. That’s good news, but is it enough?
Let’s take a quick look at the relatively simple COLA calculation. The Bureau of Labor Statistics takes the current year’s average third-quarter Consumer Price Index[1] figure and divides that figure by the same figure from the preceding year, with the result representing the year-over-year change in prices. Theoretically, this approach measures how much of an adjustment is needed to keep pace with rising costs and sets the COLA for the coming year.
How Does the 2026 COLA Compare?
Automatic COLAs began in 1975. Since that time, the average adjustment has been 3.7 percent, though that figure is skewed by a few high-inflation years—1979 (9.9 percent), 1980 (14.3 percent), 1981 (11.2 percent), and 2022 (8.7 percent). Excluding those outliers, the historical average drops to 3.1 percent.
This year’s 2.8 percent increase is therefore below the long-term average but in line with more recent inflation trends. It represents the fifth consecutive year of at least a 2.5 percent increase, something that hasn’t happened in about three decades.
How Adequate Is this Year’s COLA?
The National Council on Aging has expressed concern with the current process. “COLA might reflect the inflation rate,” said NCOA President and CEO Ramsey Alwin in a statement assessing the adequacy of the recent adjustment, “but it is woefully insufficient for older Americans who already have high health care costs and are facing even greater increases in their Medicare costs in 2026.”
The Senior Citizens League (TSCL) has echoed these concerns. Between 2000 and 2024, the costs faced by seniors have grown far faster than benefits, leading to a 36 percent loss in purchasing power, according to TSCL Executive Director Shannon Benton. TSCL studies have concluded that Social Security represents more than half of the income of nearly three-quarters of America’s seniors, with about 10 percent of retirement-age Americans living in poverty.
Medicare Part B Premiums Further Dilute Seniors’ Purchasing Power
While the COLA announcement specifically affects Social Security, Medicare premiums play a crucial role in determining how much of that COLA makes it to seniors’ bank accounts. That’s because most beneficiaries have their Medicare Part B premiums deducted directly from their Social Security payments.
For 2026, the Centers for Medicare & Medicaid Services (CMS) projects an 11.6 percent increase in monthly Part B premiums (from $185 to $201.60), thus negating a substantial portion of the COLA. Taking this number into account, for an average Social Security recipient, the approximate monthly increase of $56 noted earlier would be a net $34.50.
What Does the Future Hold?
Given Social Security’s tenuous financial future and the increasingly urgent need for reform, it’s likely that changes to the COLA process will be considered. TSCL, for example, advocates the use of the Consumer Price Index for the Elderly (CPI-E), a research price index designed to measure price changes weighted toward spending patterns of older Americans. Many other sources have weighed in with proposals to influence the COLA calculation process, but until a full plan to address Social Security’s looming insolvency, the outcome remains to be seen.
[1] The current process uses the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W)
Democrats will call me a racist, because I’ve been paying into Social Security for the last 55yrs, and I believe we shouldn’t be giving over $3000 a month to illegals. When will our government officials recognize these shameful policies is hurting the very people that worked tirelessly to help build this great nation. Policies that are stealing the very little money we have left through higher taxes, fees, and manufactured inflation. When they took God out of our schools and out of their hearts, they lost their compassion for humanity (other than those they can buy to vote them in office). They should be discussed with themselves, but their ego and lust for power and riches will never allow that.
Just think about the Billions, maybe Trillions that were just thrown away, yet America can’t afford to give Seniors enough to eat and heat their homes.
Definitely, health care cost for senior citizens is preventing those citizens to live affordably. COLA is not keeping with the raises of health care costs. Again, health care is only looking at the bottom line –$$$$$$$.
Stop giving free health care to illegals and give it to seniors. We earned it, they didn’t.
You did not go far enough on your figures as my part D went up 10.00 and my Medicare supplement went up 70.00 so I am really in the hole over 40.00.
Every time we get these COLA raises, medicare rates increase and eat the raise up..
AMAC needs to push Congress to pass a bill that will keep SS benefits solvent past 2034 & quit pushing the problem on to next administration. Congress does not really care because they are not one of the 64 million people that have SS as their main source of income. Write your congressman and tell them to act now !!!!!!!!!!!!
The illegal immigrants do not deserve to collect any Social Security funds whatsoever.
The best way to fix Medicare and Social Security is to Mandate that all of Congress, any Elected, Appointed or Hired Public Employee only gets Medicare and Social Security as their Retirement plan. Any other plan they choose, outside of Medicare and Social Security, must by fully funded by their own Before Tax Income with “No” Employer Matching. Elected, Appointed or Hired Federal, State or Municipal Employees must get the exact same Medical and Retirement plan as the Citizens they’re supposed to serve get. COLA should only be determined by what Senior Citizens use and not by the current program. Food, Medical, Housing, Insurance and Utilities impact the dollars Senior Citizens have. Entertainment and Gasoline use are used much less by Seniors than eating and housing so is shouldn’t even be part of the equation.
It definitely isn’t enough, esp with the cost of MC going up.. Credit Card Debt is going up in order to survive!!!
Taking into account increases in total co-pays premiums, and deductibles, this increase will likely equate to a $200 loss in income for most seniors.
$716 billion was taken from medicare to fund Obamacare ACA…….that probably has something to do with increased Medicare co-pay.
The Politicians think they have a much better use for the Money, don’t they always
Eliminate the earned income ceiling on wages will go a long way to close the gap on the so called deficit in social security funding. What happened to the DOGE report about how many ineligible recipients receiving social security and other fraud uncovered? How much are the savings from just cleaning up the rolls?
No where does it mention the increase from medicare costs that will more than take this slight increase. Our “take home pay” will be less due to the medicare increases.
After the rise in Part B and supplements, I might have $10 left over. Deduct from that the rise in Medicare deductible, rent increase, utilities, groceries going up (yes, even though transportation is cheaper most companies are not lowering their prices because wages have gone up). I live in an old RV in the cheaper SW. I could never afford even an apartment let alone a house.
Why does MC premium have to keep going up! Certainly negates the COLA….. sure hurts…..
Many of us are cutting portions, eating less red meat and buying fruit instead of carb snacks. We remember the men and women in the 50s were half the size we are now. Our friends are buying less food and getting healthier.
I had got a raise in social security my medicare cost went up the same amount, and I got nothing.
Like other comments with medicare increase & supplement increase (which I haven’t even used but must pay for one way or the other) I’m in the hole.
COLA for me is about $35 more a month, subtract the $30 raise in Meficare, my net gain is $5 per month. Not sure where to spend my windfall..What a joke.
It has worked that SS benefits increase with inflation percent, but the problem in 2025 is that food & energy costs are much higher than the 2.8 % increase. And I fear that all of the tariff increases have not shown up yet and will increase costs worse. I have noted the cost of 3-pounds of coffee here has gone from $12 to $22 dollars since the 50% tariff on Brazil & I guess you do not care if you do not like to drink coffee.
We recently got our flu shots. They cost medicare $148 each and medicare (we taxpayers) paid it: $296 for what used to be $2.
Something is very wrong with medical costs.
I FIGURE THAT MY SOCIAL SECURITY HAS NOT COME CLOSE TO THE DOLLARS DEVALUATION (INFLATION). ADD UP ALL THAT LOST INCOME OVER THE YEARS AND I HAVE WATCHED MY BUYING POWER DIMINISH SIGNIFICANTLY.
THE ONES AT FAULT FOR THIS ARE POLITICIANS AND FROM WHAT I HAVE READ MOST OF THEM DON’T KNOW HOW TO BALANCE A CHECKING ACCOUNT AND THAT’S A BIG REASON FOR AMERICA’S $37 TRILLION DOLLAR NATIONAL DEBT.
“For 2026, the Centers for Medicare & Medicaid Services (CMS) projects an 11.6 percent increase in monthly Part B premiums (from $185 to $201.60)” while the COLA is based on the same data increases only 2.8 percent. Since I’ve been paying $201 for Part B since I retired in 2021 I guess I’ll get to pay $224 now. I’m glad I waited to take social security until age 70 or I wouldn’t be able to afford Part B.