{"id":267537,"date":"2025-11-02T20:40:21","date_gmt":"2025-11-02T20:40:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/267537\/"},"modified":"2025-11-02T20:40:21","modified_gmt":"2025-11-02T20:40:21","slug":"social-securitys-2026-cola-is-a-lose-lose-scenario-for-retirees","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/267537\/","title":{"rendered":"Social Security’s 2026 COLA Is a Lose-Lose Scenario for Retirees"},"content":{"rendered":"

It’s a more generous boost than 2025’s COLA, but it still probably won’t do enough.<\/p>\n

For some retired Americans, Social Security is supplemental income, or bonus money they can use on top of a robust nest egg. But not everyone is that fortunate.<\/p>\n

The reality is that many retired Americans today do not have any savings. And many who do only have a modest amount, making it so that Social Security<\/a> constitutes the bulk of their income.<\/p>\n

\"Social<\/p>\n

Image source: Getty Images.<\/p>\n

That’s a problem, though, because the average retired worker on Social Security only receives a little more than $2,000 per month these days. Given how rampant inflation<\/a> has been over the past few years, for a lot of seniors, that’s generally not enough to maintain a comfortable lifestyle.<\/p>\n

Now the good news in the context of inflation is that Social Security benefits are eligible for an automatic cost-of-living adjustment<\/a>, or COLA, each year. COLAs are supposed to help benefits keep up with inflation so that seniors don’t fall behind.<\/p>\n

The Social Security Administration recently announced that Social Security benefits<\/a> are getting a 2.8% COLA in 2026. And that’s a more generous raise than the 2.5% COLA Social Security recipients got at the start of 2025. Still, the 2026 COLA is shaping up to be a lose-lose situation for retirees, despite it being considerably higher than this year’s boost.<\/p>\n

The problem with 2026’s COLA is twofold<\/p>\n

There are two issues with 2026’s Social Security COLA.<\/p>\n

First, even though a 2.8% raise might seem fairly generous, the reality is that Social Security COLAs have long failed to help seniors maintain their buying power in the face of inflation.<\/p>\n

Social Security COLAs are based on year-over-year third-quarter changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. But the CPI-W measures the expenses urban and clerical workers face — not retirees.<\/p>\n

Advocates have pushed for a more senior-friendly formula to calculate COLAs. But since 2026’s Social Security COLA is based on the CPI-W, there’s a good chance it will fall behind inflation as it relates to seniors specifically. And a big reason is that healthcare, which tends to be a big expense for Social Security recipients, commonly rises faster than broad inflation.<\/p>\n

The other issue with 2026’s Social Security COLA is that an increase in the standard Medicare<\/a> Part B premium will eat into many seniors’ upcoming raise. It’s true that not all Social Security recipients are enrolled in Medicare. But for those who are, Part B premiums are paid directly out of their monthly Social Security checks.<\/p>\n

It’s common for Medicare Part B hikes to erode Social Security COLAs. And it seems like 2026 will fit that pattern for any retiree who’s signed up for both Medicare and Social Security.<\/p>\n

Take steps to improve your financial picture<\/p>\n

If you’re a retiree who’s been struggling financially, you can’t expect 2026’s Social Security COLA to do you do all that much good. A better idea is to take a look at your financial situation and see what changes you can make to improve it.<\/p>\n

That could mean:<\/p>\n

Downsizing to a smaller home to lower your housing costs
\nMoving in with an adult child for a few years to build some savings
\nRelocating to a part of the U.S. where living costs are generally cheaper
\nShopping around for a more cost-effective Medicare plan during fall open enrollment
\nGoing back to work part-time<\/p>\n

While it’s easy to argue that a 2.8% Social Security COLA is better than the 2.5% raise that arrived in 2025, it’s really not a great solution for seniors. The sooner you recognize that, the sooner you can make positive changes that improve your financial outlook for 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"It’s a more generous boost than 2025’s COLA, but it still probably won’t do enough. For some retired…\n","protected":false},"author":2,"featured_media":267538,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":{"0":"post-267537","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-personal-finance","10":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/267537","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=267537"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/267537\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/267538"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=267537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=267537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=267537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}