Millions of Americans relying on Social Security may see their monthly checks increase by roughly 2.7% to 2.8% in 2026, according to recent projections based on the latest inflation data. That translates to an extra $54 to $55 per month for the average retired worker.
Mary Johnson, an independent Social Security and Medicare analyst, estimates a 2.8% cost-of-living adjustment (COLA) could take effect next year, raising the average monthly retirement benefit to about $2,009. Meanwhile, the Senior Citizens League anticipates a slightly smaller 2.7% increase, which would add $54 to the average $1,955 monthly benefit.
These projected increases are modest compared with recent years. Social Security recipients saw a 2.5% boost in 2025, while the COLAs in 2022 and 2023 were historically high at 5.9% and 8.7%, respectively. The adjustments are calculated annually using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), with the official 2026 COLA expected to be announced in October.
Retirees’ Concerns Over Inflation and Costs
Even with the projected COLA, retirees worry that inflation could outpace these increases. Nationwide Retirement Institute surveys show that half of retirees fear tariffs and rising prices could erode their purchasing power, while more than half have already reduced discretionary spending to keep up with rising costs.
Medicare premiums are also expected to rise in 2026. The standard Part B premium could jump by $21.50 to $206.50 per month, nearly matching the program’s record increase of $21.60 in 2022. Part D prescription drug premiums could increase by as much as $50 per month.
Navigating Inflation and Fixed Income
Seniors relying on fixed-income investments, like bonds, may feel the pinch if returns fail to keep up with inflation, while those with outstanding mortgage debt could benefit from the decreasing real value of what they owe. Experts note that since Social Security COLAs are applied once a year, there can be a lag between rising costs and the benefit adjustment.
“Retirees who plan and smooth their spending can reduce the impact of inflation fluctuations,” said Jean-Pierre Aubry, associate director of retirement research at Boston College. Financial advisors can help retirees understand COLA adjustments, manage benefits, and plan for Medicare and other rising costs.
While most seniors believe they can manage Social Security benefits on their own, surveys suggest only one-third feel confident in their understanding of the program. Professional guidance may help close that gap and ensure retirees maintain their financial stability despite rising living expenses.