The 2.8% Social Security COLA Is a Big Letdown for Retirees. Here's How Much You'll Actually Get

It's official: the Social Security Administration announced a 2.8% cost-of-living adjustment (COLA) for 2026. It's more than retirees got last year -- but it's still not much.

Medicare Part B premiums are expected to rise again, and healthcare tends to eat a bigger share of seniors' budgets than the COLA reflects.

Here's how to find out how much your benefits will actually change, as well as how to make the most of them.

What your raise looks like after Medicare

The Social Security Administration will notify beneficiaries of their 2026 payment amounts in December. In the meantime, you can calculate it for yourself.

Here's a quick formula:

2026 benefit = 2025 benefit x 1.028

Then subtract your 2026 Part B premium (and any IRMAA surcharge if your income is high) to see your take-home amount.

2026 Medicare premiums will be finalized later this fall, but the latest projection pegs the standard Part B premium at about $206.50 -- that's $21.50 more than 2025.

Example: middle-of-the-road benefit

• Current gross benefit: $2,000/month
• COLA adds $56; new gross benefit is $2,056
• If Part B rises by $21.50, then net increase is $34.50 before taxes

For many retirees, about 40% of the COLA could be absorbed by the Part B increase alone.

Will any of it be taxed?

Social Security can be taxable based on your provisional income. That's half your benefits + income from other sources + tax-exempt interest.

• 50% of benefits may be taxable once provisional income exceeds $25,000 (single) or $32,000 (married filing jointly)
• Up to 85% can be taxable above $34,000/$44,000

If your benefits are taxable, then that will eat into your 2026 COLA as well.

Make the most of your COLA

You can still squeeze real value out of a modest raise -- without taking on risk. If you don't yet have a high-yield savings account, then I strongly recommend opening one now.

Why:

• Instant access to cash for your immediate spending needs
• FDIC insurance up to $250,000 per person, per bank
• Yields of up to 4.50% per year

What to look for:

• No monthly fees
• Fast, easy transfers between checking and savings
• A website and mobile app that are easy to use

The best high-yield savings accounts offer all these features and more. Opening one takes minutes online.