If you rely on Social Security or Medicare, 2026 is shaping up to be a year of major change — and it’s important to understand how these updates could impact your monthly budget.

Let’s break down the key adjustments coming your way so you can plan ahead with confidence.

✅ Social Security COLA Increase for 2026

The Social Security Cost of Living Adjustment (COLA) for 2026 is projected to be 2.8%. For the average retiree, this means your monthly benefit will increase by about $56 starting in January 2026.

That’s good news, especially after years of high inflation. But it doesn’t tell the whole story — because your monthly expenses are also rising.

💸 Medicare Costs Are Also Increasing

While Social Security benefits are increasing, Medicare premiums and deductibles are going up as well. For many retirees, these rising healthcare costs may absorb most of the COLA increase.

Here’s what’s changing:

Medicare Part B
– The monthly premium is projected to increase from $185 to $206.50.
– The annual deductible is expected to rise from $256 to $288.

This represents an increase of more than 11% to the Part B premium alone.

Medicare Part D (Prescription Drug Plans)
– The annual out-of-pocket cap will increase from $2,000 to $2,100.
– The annual deductible will rise to $615.

That means retirees may pay more out of pocket before drug coverage kicks in — and potentially more over the course of the year if prescriptions reach catastrophic coverage.

🧮 What This Means for Your Budget

While a COLA increase is a positive development, the rising Medicare Part B and Part D costs will likely absorb much of that added income.

To put it simply:

• Benefits are going up
• But healthcare costs are going up too

This is one of the biggest challenges in retirement planning: inflation doesn’t impact everything equally, and healthcare costs often rise faster than income.

🧠 Why Planning Ahead Matters

Healthcare will likely remain one of your largest retirement expenses, and these updates are a reminder of why planning ahead is so important.

It’s essential to review your retirement income plan regularly to ensure it stays aligned with your needs. Here are a few questions worth asking:

• How will higher healthcare costs affect your monthly spending?
• Do you have a plan in place for rising medical expenses over the next 10–20 years?
• Is your Social Security strategy still optimized for your situation?

At Clarity Wealth, we help retirees evaluate the long-term impact of Social Security and Medicare changes so they can maintain confidence and financial stability throughout retirement.

📍 The Bottom Line

Here’s the key takeaway:

Social Security benefits are increasing in 2026, but Medicare costs are rising too — and for many retirees, the higher premiums and deductibles may offset most of the COLA.

Understanding how these changes affect your retirement income and healthcare expenses is essential. The earlier you prepare and adjust your plan, the more control and peace of mind you’ll have.

If you’d like help reviewing your Medicare and Social Security strategy, we’re here as a resource.