Social Security benefits for 2026 will increase by 2.8%, affecting over 75 million Americans, with payments starting in January. While benefits rise, higher Medicare premiums and new tax deductions will influence retirees' net income. The average benefit for retired workers will increase to $2,071, and a new $6,000 tax deduction for seniors will be available through 2028.
In 2026, Medicare beneficiaries will face increased premiums and deductibles, higher out-of-pocket costs for prescription drugs, and new negotiated rates on 10 common medications, making it crucial to review plans and budget accordingly for retirement healthcare expenses.
The 2026 Social Security cost-of-living adjustment (COLA) is set at 2.8%, which may be insufficient for seniors to keep up with rising expenses, especially as Medicare premiums are expected to increase significantly, potentially offsetting the benefits of the COLA and risking increased poverty among seniors.
The US government announced a projected 2.7% to 2.8% increase in Social Security and SSI benefits for 2026, starting January, to help beneficiaries cope with inflation, with additional one-time payments of $2,000 in October 2025. However, rising Medicare premiums and other factors may offset the benefit increase.