2026 Social Security Cost-of-Living Adjustment (COLA) Update: What It Means for You and Your Medicare Costs

Each fall, the Social Security Administration (SSA) announces its annual cost-of-living adjustment (COLA), which determines how much Social Security and Supplemental Security Income (SSI) benefits will increase for the coming year. The COLA is designed to help retirees and people with disabilities maintain their purchasing power as prices rise due to inflation.

For 2026, the SSA has announced a 2.8% COLA increase, impacting more than 75 million Americans who receive Social Security or SSI benefits. While this boost may not seem large, it can influence several aspects of your financial plan, including your Medicare premiums and IRMAA brackets (Income-Related Monthly Adjustment Amount).

Here’s a closer look at what’s changing and what you can expect in 2026.

The 2026 COLA Increase

Starting in January 2026, nearly 71 million Social Security beneficiaries will see a 2.8% increase in their monthly benefits. For the 7.5 million SSI recipients, the higher payments will begin a little earlier — on December 31, 2025. (Some individuals receive both Social Security and SSI benefits, so they’ll notice the adjustment in both payments.)

Updated Income and Earnings Limits for 2026

Several other key Social Security figures will also increase next year:

• Taxable maximum earnings: The maximum amount of income subject to Social Security taxes will rise to $184,500.

• Earnings limit for those under full retirement age: Beneficiaries younger than full retirement age can earn up to $24,480 in 2026 before benefits are reduced. For every $2 earned above that amount, $1 in benefits will be withheld.

• Earnings limit for those reaching full retirement age in 2026: The limit increases to $65,160. In this case, Social Security withholds $1 for every $3 earned over that threshold, until the month the beneficiary reaches full retirement age.

• No limit on earnings applies once you reach full retirement age for the entire year.

When and How You’ll Receive Your COLA Notice

In late November 2025, most beneficiaries will receive their COLA notice through their my Social Security online account. Notices are posted in the secure Message Center, where you can view, download, and save them for your records.

If you haven’t already created a my Social Security account, you can do so for free at SSA.gov/myaccount. It’s a simple and secure way to manage your benefits and receive future notices electronically instead of by mail.

Watch Out for Scams

The Social Security Administration will never call, email, or text you to ask for money or personal information. Be cautious of messages requesting gift cards, wire transfers, or login details. If you receive a suspicious message, do not click any links. Instead, visit SSA.gov directly to access your account or contact the agency.

Keep Your Information Up to Date

Life changes can affect your benefits, so it’s important to report certain events promptly. Notify the SSA if you:

• Get married or divorced

• Lose a spouse or ex-spouse

• Have a child or stepchild receiving benefits on your record who no longer lives with you

Keeping your information current helps prevent payment errors and ensures your benefits remain accurate.

How COLAs Are Determined

The purpose of the COLA is to protect Social Security and SSI beneficiaries from the effects of inflation. The adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a government measure of price changes for common goods and services.

The SSA compares the CPI-W from the third quarter of one year to the third quarter of the next. If prices have risen, benefits increase by that percentage. If there’s no increase in the CPI-W, there is no COLA for that year.

Automatic annual COLAs began in 1975, following legislation passed by Congress in the 1972 Social Security Amendments. Prior to that, benefit increases required new legislation each time inflation rose.

How the 2026 COLA Could Affect Medicare

While the COLA directly impacts Social Security and SSI benefits, it can also influence Medicare premiums and IRMAA brackets.

• Medicare Part B premiums: Each year, the Centers for Medicare & Medicaid Services (CMS) sets new Medicare Part B premium amounts. These often rise modestly in years when COLA increases occur. Because Part B premiums are usually deducted directly from your Social Security check, your net benefit increase could be slightly smaller than 2.8%.

• IRMAA (Income-Related Monthly Adjustment Amount): If your income has risen (including due to COLA increases or other sources) you may move into a higher IRMAA bracket, meaning you’ll pay more for Medicare Part B and Part D.

Your Local Medicare Specialists agent can help you review your situation and determine whether you might be affected.

What This Means for Retirees

The 2026 COLA is designed to help offset inflation and maintain the value of your benefits in retirement. Although a 2.8% increase might not cover all rising costs, it provides important relief for retirees living on a fixed income.

If you’re concerned about how your Social Security increase could affect your Medicare premiums, IRMAA brackets, or overall budget, Local Medicare Specialists is here to help. Our licensed agents can walk you through how these updates may impact your coverage and make sure you’re getting the best value from your Medicare plan.