2026 Social Security COLA Rises 2.8%, Seniors Risk Poverty: Here’s Why

In 2026, Social Security beneficiaries will see a cost-of-living adjustment (COLA) increase of 2.8%. This adjustment, intended to help seniors keep pace with inflation, translates to an average monthly benefit increase of approximately $56 starting in January.

Impacts of the 2.8% COLA Increase

Despite the upcoming increase, analysts express concerns that it may fall short of adequately addressing seniors’ rising living costs. A recent survey by the nonprofit organization AARP found that a significant majority, 77% of Americans aged 50 and older, believe a 2.8% raise is insufficient to meet their financial needs.

• 75% of Republicans disagree with the adequacy of the COLA increase.
• 82% of Independents share similar sentiments.
• 79% of Democrats also feel the COLA does not meet inflationary pressures.

Medicare Premiums Expected to Increase

Medicare premiums present a significant concern for retirees in 2026, as they may consume the entire COLA adjustment. Analysts anticipate that the standard monthly premium for Medicare Part B could rise to $206.50, a jump of $21.50 from the previous year. Moreover, some Part D drug plan premiums may see increases of up to $50, complicating financial planning for seniors.

Poverty Concerns Among Seniors

The potential inadequacy of the 2.8% COLA raise raises worrying prospects for senior citizens. An increase in the poverty rate among those aged 65 and older was noted in Census Bureau reports, with the rate climbing from 14.2% to 15%—the highest among all age groups.

• AARP’s survey revealed that 72% of older Americans believe a COLA of 5% or higher is necessary.
• 26% indicated that an 8% increase would be required to keep up with living expenses.

Understanding the COLA Calculation

The Social Security Administration calculates the annual COLA based on the consumer price index (CPI) for urban wage earners from July to September. Recent reports indicate that the overall CPI rose by 3.0%, while the index specific to urban wage earners increased by 2.9%.

Current Social Security Beneficiaries

As of August, over 74.5 million individuals are receiving Social Security benefits across various categories, including retirees and disabled individuals. The challenges posed by rising living costs highlight the importance of ongoing discussions about adjusting the COLA to better serve the aging population.