Your Social Security Raise Just Got Smaller

If you got a raise this year and don’t feel any richer, you’re not imagining it.

The 2.8% COLA that took effect in January bumped the average retirement benefit from $2,015 to roughly $2,071 a month – about $56 more. In the same window, the standard Medicare Part B premium jumped 9.7%, from $185 to $202.90 a month. For most retirees, that’s an $18 monthly increase eating straight into the raise before a single grocery bill gets paid.

Run the numbers on a typical single retiree: a $56 COLA bump minus an $18 Part B increase leaves about $38 a month in real gain. That’s before Part D premiums, which also scale with income, and before the new $283 Part B deductible.

This isn’t a one-year fluke. Medicare premiums have outpaced Social Security’s cost-of-living adjustment in six of the last ten years, and the gap widens further for retirees whose income crosses the thresholds that trigger IRMAA surcharges on top of the standard premium.

Where the math gets worse

Retirees on Medicare Advantage or carrying supplemental coverage often see additional premium creep that never shows up in the headline numbers. And every dollar going toward health premiums is a dollar not available for the actual cost of long-term care, which keeps climbing faster than either COLA or general inflation.

That’s the real risk. Someone living on a fixed income who assumed Social Security would keep pace with expenses is now watching two lines on the ledger move in opposite directions. Health costs eat into income growth every single year, and the year a serious care need finally shows up is exactly the year this squeeze does the most damage.

One piece of relief

There’s a bright spot for 2026: a new $6,000 tax deduction for taxpayers 65 and older, which can lower or offset taxes owed on Social Security income for many retirees. It won’t undo the Part B increase, but it’s worth factoring into your tax planning this year, especially if your income sits close to a threshold that affects Medicare premiums or benefit taxation.

What this means for veterans

For veteran families already managing a daily living need, VA Aid & Attendance can offset exactly the kind of cost Medicare doesn’t touch, whether that’s in-home help, assisted living, or a nursing facility. It’s one of the most underused benefits available, and it works alongside Medicare rather than against it. If a veteran or surviving spouse in your family hasn’t looked into it, this is a good year to ask.

What this means for your plan

Take this as a prompt to look at the plan you already have and ask whether it accounts for premiums rising faster than benefits, year after year.

That’s the conversation we have with clients constantly, whether we’re coordinating Social Security timing with Medicare enrollment, structuring assets so a future care need doesn’t force impossible tradeoffs, or helping a veteran’s family access benefits that offset costs Medicare won’t cover. Long-term care is expensive under the best of circumstances. It gets a lot more manageable when the numbers are planned around instead of reacted to.

If you’ve looked at your last Social Security statement and wondered where the raise went, that’s worth a real conversation, not a guess.

Talk to Burgos & Brein about your retirement income plan. We offer free consultations to help you understand where you stand and what to do next.

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