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Published: May 22, 2026
The Social Security Administration (SSA) announced Social Security and Medicare changes for 2026, including a 2.8% cost-of-living adjustment (COLA) for Social Security benefits and increases in Medicare premiums and deductibles. These changes help recipients keep up with inflation and rising healthcare costs.
This increase is slightly higher than the 2.5% COLA for 2025 and is a bit below the roughly 3.1% average COLA over the last decade.
Additional Social Security Updates
- SSI Payments: Nearly 7.5 million Supplemental Security Income (SSI) recipients will see a 2.8% increase in their payments beginning December 31, 2025. SSI, which provides financial assistance to low-income individuals who are aged, blind, or disabled, receives the same COLA adjustment as Social Security benefits to help keep pace with inflation.
- Taxable Earnings Cap: The maximum earnings subject to Social Security tax will increase from $176,100 to $184,500 in 2026. This yearly adjustment is tied to wage growth and affects higher earners, since wages above that ceiling are not subject to the Social Security portion of payroll tax. As in prior years, the taxable maximum remains one of the areas often discussed in broader conversations about Social Security’s long-term funding.
- Retirement Earnings Test: If you are under full retirement age for all of 2026, the earnings limit is $24,480, and $1 in benefits will be withheld for every $2 earned above that amount. If you reach full retirement age in 2026, the earnings limit is $65,160, and $1 in benefits will be withheld for every $3 above the limit until the month you reach full retirement age.
- Average Monthly Benefit: SSA estimates that the average retired worker benefit will rise from $2,015 to $2,071 in January 2026, an increase of about $56 per month.
Medicare Premiums and Deductibles
Meanwhile, the Centers for Medicare & Medicaid Services (CMS) has announced new Medicare costs for 2026:
- Part A Costs:
- Most beneficiaries still pay $0 for the Part A premium.
- The Part A deductible rises to $1,736 (+$60).
- Coinsurance for hospital stays (days 61–90) will increase to $434 per day (+$15).
- Lifetime reserve day coinsurance rises to $868 per day (+$30).
- Skilled nursing facility coinsurance (days 21–100) will be $217 per day (+$7.50).
- Part B Premium: The standard monthly premium will rise by $17.90 to $202.90.
- Part B Deductible: Up by $26, increasing to $283.
- Part D Premiums: Medicare Part D premiums still vary by plan, but CMS projected that the average standalone Part D premium will decrease from $38.31 in 2025 to $34.50 in 2026. For Medicare Advantage plans with drug coverage, CMS projected the average Part D total premium would fall from $13.32 to $11.50.
- Part D Standard Deductible: The standard deductible for 2026 will be $615.
The Net Impact on Your Budget
For most beneficiaries, the COLA increase will more than offset the higher Medicare costs. If I had a nickel for every time someone told me that Medicare increases completely erase the Social Security COLA, I’d be a rich man!
While the percentage increases for Medicare Part B, and in some cases Part D, might be higher than the COLA for Social Security, they are applied to much smaller numbers. This year, the roughly $56 average monthly COLA increase exceeds the $17.90 rise in the standard Part B premium, leaving many recipients with a net gain even before considering their personal Part D plan costs.
Keep in mind, individuals subject to income-related monthly adjustment amounts (IRMAA) for Medicare Parts B and D may see higher premium increases, which could offset some of the COLA benefit.
Other Minor Updates for 2026
- Simplified COLA Notices: SSA says benefit notices began going out in early December 2025, and beneficiaries with my Social Security accounts could access their notice online even sooner.
- Medicare Benefit Amounts: Medicare premium information for 2026 was also made available through my Social Security and mailed notices.
What All of This Means for You
The 2026 adjustments reflect the usual balancing act between inflation and rising healthcare costs. While Medicare costs are going up again, most Social Security recipients paying the standard Part B premium should still see a net increase in their monthly benefits.
To view your updated benefit notice online, consider setting up a my Social Security account at SSA.gov ↗.
For more information about Social Security, check out these blogs on Raining Pennies: