Ariana
Millions of retirees are poised to see higher Social Security benefits in 2026, thanks to a new cost-of-living adjustment (COLA).
Early projections point to a modest increase of roughly 2.5%–2.7%, but many seniors worry that tariff-driven price increases—especially on imported goods and everyday essentials—could reduce the real value of that raise.
Below, you’ll find the latest forward-looking numbers for 2026, how the COLA is calculated, what to expect from Medicare Part B premiums, and how new and proposed tariffs could show up in your grocery cart and monthly budget.
(The official COLA will be set in October 2025, using inflation data from July–September 2025.)
What We Know (and Don’t) About the 2026 COLA
- How COLA is set. By law, Social Security’s COLA compares the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) for the third quarter (July–September) with the same quarter a year earlier. The Social Security Administration (SSA) announces the result each October, and new amounts begin with January payments.
- Current projection range for 2026. As of late August 2025, reputable trackers and reporters peg the 2026 COLA near 2.5%–2.7%. Recent updates include a 2.5% forecast and multiple 2.7% reads as inflation has run slightly above the prior year. Expect the number to shift with late-summer price data until October’s official announcement.
What that could mean in dollars
- The average retired-worker benefit in early 2025 was roughly $1,976–$2,007 per month (depending on the month). Applying a 2.5%–2.7% COLA suggests an estimated increase of about $49–$54 per month (≈ $588–$648 per year) for the average retiree in 2026. (Your amount varies with your current benefit.)
Key takeaway: A mid-2% COLA would lift checks in 2026, but it’s not a windfall—especially if other costs accelerate.
Why Tariff-Driven Prices Are a Concern for 2026
Several new or higher tariffs are either in effect or being queued up in 2025. Economists are tracking how those levies flow through to consumer prices:
- A Yale Budget Lab assessment estimates the 2025 tariff package could raise consumer prices ~1.8% in the short run (before any Fed counter-moves), assuming substantial pass-through to shoppers.
- A Federal Reserve staff note finds the 2025 tariffs have so far added roughly 0.3% to core goods prices and 0.1 percentage point to core PCE inflation.
- A recent report highlighted that the average U.S. household could face about $2,400 in higher annual costs as the latest levies take effect, with the effective tariff rate rising to its highest since the 1930s.
What that means for retirees: Even with a 2.5%–2.7% COLA, tariff-linked price pressure on goods like appliances, electronics, apparel, and some food inputs could absorb part of the raise—especially if retailers pass more of the tariff costs along to consumers during 2026.
Medicare Part B Premiums Could Trim Your Net Raise
Another moving part is Medicare Part B, which is typically deducted from Social Security checks.
- The standard Part B premium for 2025 is $185.00/month.
- The Medicare Trustees and several independent briefings project a notable jump to about $206.50/month in 2026—an ~11.6% increase (≈ +$21.50 per month).
- That step-up would absorb a sizable share of a mid-2% COLA for many beneficiaries. (Final 2026 Part B figures are due later in 2025.)
Example: If your 2025 check is $2,000/month, a 2.6% COLA would add about $52. If Part B rises ~$21.50, your net increase could be roughly $30.50—before considering tariff-driven price moves.
For higher-income enrollees, IRMAA (income-related surcharges) may also rise in 2026, increasing total monthly health costs.
Projections for 2026 IRMAA brackets and surcharges are already circulating; official amounts will be finalized by CMS in the fall.
Other 2026 Social Security Changes to Watch
- Full Retirement Age (FRA) at 67. For anyone born in 1960 or later, FRA is 67 in 2026—completing the long-planned increase passed decades ago.
- Taxable wage base (projected). The maximum earnings subject to Social Security tax is projected to rise from $176,100 (2025) to around $183,600 (2026), per the Trustees’ intermediate estimate (final figure typically lands in October). That would lift the maximum OASDI payroll tax for high-wage workers and their employers.
- Payment schedule. The familiar “second/third/fourth Wednesday based on birth date” schedule continues into 2026 (see SSA’s 2026 calendar for details).
Projected 2026 Snapshot (as of late August 2025)
All figures below are projections and subject to official announcements in fall 2025.
| Item | 2025 (for reference) | Projected 2026 | What it means |
|---|---|---|---|
| COLA (benefit raise) | 2.5% | ~2.5%–2.7% | Modest lift to monthly checks; official figure in Oct. |
| Average retired-worker benefit | ~$1,976–$2,007/mo | +~$49–$54/mo from COLA | Individual results vary; Medicare & prices affect take-home. |
| Medicare Part B (standard premium) | $185.00/mo | ~$206.50/mo (+$21.50) | Bigger deduction from checks unless you pay Part B separately. |
| Part B deductible | $257 | ~$288 | Higher out-of-pocket before coverage. |
| Taxable wage base (OASDI) | $176,100 | ~$183,600 | Higher payroll tax ceiling for high earners. |
| Tariff impact (headline) | New/raised levies in 2025 | Inflation tailwind into 2026 | Estimates range from +0.1 pp to +1.8% on prices in short run. |
How Tariffs Could Interact With Your 2026 COLA
Tariffs raise import costs. Depending on the product category and supply chains, businesses may absorb, re-route, or pass through costs.
Recent analyses show mixed pass-through, with consumers facing some of the burden and retailers strategizing to keep key prices competitive; nonetheless, the effective tariff rate in 2025 is elevated, and further increases would lift price pressure into 2026.
Bottom line for retirees:
- A ~2.5%–2.7% COLA could be partially offset by higher consumer prices linked to tariffs and by higher Medicare premiums.
- The net effect on your wallet depends on your spending mix (how much you buy of tariff-affected goods), your health-care usage, and whether you face IRMAA surcharges.
Smart Moves to Keep More of Your 2026 Raise
Review Medicare during Open Enrollment (Oct. 15–Dec. 7). Compare Part D and Medicare Advantage options to control drug and premium costs. Projections show Part D premiums are more contained due to policy caps, but formularies and deductibles still vary.
Audit your 2026 budget for tariff-sensitive items. Electronics, appliances, certain tools, apparel, and some food inputs are more exposed to import cost changes. Shop alternatives, compare retailers, and consider delaying non-essential purchases if prices spike.
Plan for the wage test if working before FRA. If you’ll be under FRA in 2026, be mindful of earnings limits to avoid benefit withholdings (limits are inflation-adjusted annually).
Use a “my Social Security” account. Track your benefit, check your 2026 payment amounts once posted, and validate any withholding changes (Part B, IRMAA).
2026: What to Watch on the Calendar
- October 2025: Official COLA announcement; updated 2026 payment calendar, and likely 2026 taxable wage base confirmation.
- Fall 2025: Medicare finalizes 2026 Part B premium/deductible and IRMAA brackets.
- January 2026: New COLA shows up in Social Security payments; higher Part B deductions take effect.
Early indications suggest Social Security benefits will rise modestly in 2026, likely in the 2.5%–2.7% range.
But two headwinds loom: a projected jump in Medicare Part B premiums and tariff-linked price increases that could keep specific categories of consumer goods elevated.
The result for many retirees will be a smaller net gain after deductions and real-world prices.
Your best defense is preparation: track the October 2025 announcements, reassess your Medicare choices during Open Enrollment, and budget around categories where tariffs are most likely to push prices higher.
With a few timely adjustments, you can protect more of your 2026 raise and maintain purchasing power in the face of shifting policy and prices.