Millions of retirees rely on the annual Social Security cost-of-living adjustment, or COLA, to ensure their income keeps up with rising expenses in retirement. As inflation has soared over the last few years, the importance of the annual bump in benefits has only increased.
But some seniors may be sorely disappointed by their checks in 2026. In fact, up to 3.6 million retirees could see no increase in their monthly benefits checks at all. Making matters worse, these are seniors who could likely benefit most from an increase in their benefits.
Here's what retirees need to know.
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What goes into a Social Security check?
When the government sends you your Social Security check each month, there's a good chance it doesn't match the amount of your actual benefit on your Social Security statement exactly. That's because the government might withhold some of that benefit for various items.
If you request the government withholds income taxes from your benefits, you'll see a smaller amount each month. Additionally, the government might withhold some benefits due to the retirement earnings test, if you're still working before reaching full retirement age.
The government may also garnish your monthly benefits if it accidentally overpaid you in a prior year. Or if you have other federal debts, those will come out of your Social Security benefits before you see it hit your bank account.
One of the most common things withheld from your Social Security benefits are Medicare premium payments. The government automatically enrolls anyone collecting Social Security over age 65 in the government health insurance program. And it collects the premiums straight from your monthly check.
The Center for Medicare and Medicaid Services (CMS) is responsible for setting the premium pricing. It takes into account the rising cost of providing healthcare, how much its services are utilized, and also makes adjustments to maintain the financial stability of the program.
Over the last few years, seniors have seen their Medicare Part B premiums increase substantially as medical costs rise faster than average inflation. For 2025, the premiums increased 5.9% to $185 per month (higher if you exceeded certain income limits).
Next year the premium price increase could be even higher and that could mean bad news for many seniors looking forward to a nice increase in their monthly Social Security benefits check.
The challenge for millions of seniors
When Medicare Part B premiums rise faster than the annual cost-of-living adjustment, that can mean some retirees on Medicare don't see any increase in their Social Security benefits at all. That number is usually small, but it could be well into the millions next year.
That's because the Board of Trustees in charge of Medicare and Medicaid estimate that next year's Medicare Part B premium will climb $21.20 to $206.20. That's an 11.5% increase.
Independent Social Security analyst Mary Johnson estimates next year's COLA will be 2.7% based on the most recent data available. That's in line with the Social Security Board of Trustees' estimate, but slightly more than The Senior Citizens League's 2.6% estimate. Johnson points out the disparity in the COLA and the increase in Medicare premium pricing could lead to anyone collecting about $800 or less in benefits to see no increase in their monthly checks each month. The increase in Medicare premiums will wipe out the COLA for those retirees.
Based on data from the most recent Social Security annual supplement, there were over 3.6 million people age 65 or older collecting Social Security benefits of $800 or less as of December 2023. The vast majority of those seniors are likely enrolled in Medicare just like the rest of the senior population.
At the very least, those retirees don't have to worry about a decrease in their monthly check. The hold harmless provision means the increase in Medicare premiums is capped by the actual dollar amount of their COLA. However, this puts more pressure on the financial stability of the program since Medicare won't collect full premiums from everyone, and could lead to bigger price hikes in the future.
