Social Security COLA 2026: what the 2.8% increase means (and why your net check might not rise much)

Social Security benefits are getting a 2.8% cost-of-living adjustment (COLA) for 2026. That sounds straightforward: your monthly benefit goes up to help keep up with inflation. But many retirees notice something frustrating in January—your bank deposit may rise by less than 2.8% (or less than you expected).

The reason is simple: COLA increases your gross benefit, but your net check is your gross benefit minus deductions like Medicare premiums, taxes/withholding, and other items that can change year to year.

What is the Social Security COLA?

The COLA is an automatic yearly increase that helps Social Security benefits keep pace with inflation. Social Security calculates it using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), comparing last year’s third-quarter average to this year’s third-quarter average.

What does a 2.8% COLA look like in real dollars?

A 2.8% COLA means your monthly benefit is multiplied by 1.028. Here are a few quick examples (gross amounts, before deductions):

• $1,200/month becomes about $1,233.60 (about +$33.60)
• $1,500/month becomes about $1,542.00 (about +$42.00)
• $2,000/month becomes about $2,056.00 (about +$56.00)

Social Security has estimated the average retired worker benefit increases by about $56/month with the 2026 COLA. Your personal increase may be higher or lower depending on your benefit amount.

COLA vs. your bank deposit: use the quick calculator

Why your net check might not rise much in January

COLA raises your Social Security benefit, but deductions can rise too. Here are the most common reasons your net deposit grows by less than your COLA:

1) Medicare Part B premiums often rise—and many people have them deducted from Social Security

For 2026, the standard Medicare Part B premium is $202.90/month, up from $185.00 in 2025. If your Part B premium comes out of your Social Security benefit, that increase can offset part of your COLA.

Example: if your gross benefit rises about $56/month, but your Part B premium rises $17.90/month, your net gain could be closer to about $38/month before any other changes.

2) Income-related Medicare premiums (IRMAA) can reduce (or erase) your COLA for higher earners

If your income is above certain thresholds, Medicare adds an income-related monthly adjustment amount (IRMAA) to Part B (and Part D). If you move into a higher bracket—or if your premium changes—your net Social Security deposit can rise only slightly (or even fall).

3) Your tax withholding can change what hits your bank account

Some people choose to have federal income taxes withheld from Social Security. If you withhold a percent of your benefit, the withholding generally rises as your benefit rises. That means a portion of the COLA may be diverted to taxes automatically.

4) Other deductions can change year to year

• Medicare Advantage plan premiums (if deducted from Social Security)
• Optional withholdings (like union dues or voluntary repayments)
• Garnishments or court-ordered deductions (if applicable)
• Overpayment recovery arrangements (if applicable)

5) The “hold harmless” rule can also affect what happens

In some cases, Medicare rules can limit how much your Part B premium increases if the premium hike would otherwise reduce your Social Security payment. This doesn’t apply to everyone (for example, it generally does not protect people who pay IRMAA or those who are billed for Part B premiums instead of having them deducted from their Social Security).

What you can do now (simple checklist)

• Compare gross vs. net: Look at your gross benefit, then list deductions (Part B, other premiums, taxes).
• Watch Medicare premium changes: If you pay more than the standard Part B premium, confirm whether IRMAA applies.
• Re-check withholding: If you withhold taxes as a percentage, expect the withheld amount to rise with COLA.
• Plan January budgeting realistically: Use the calculator above to estimate your “new normal” net deposit.
• Keep an eye out for SSA notices: Your COLA-adjusted benefit notice (and Medicare premium changes) help explain any net difference.

Quick FAQ

When will I see the 2.8% increase?

The 2.8% COLA is reflected in Social Security payments issued in January 2026 (for most recipients).

Does COLA apply to SSI too?

Yes, SSI federal payment amounts also increase with the COLA (though your actual payment depends on your situation and any state supplements).

Why did my friend’s check go up more (or less) than mine?

Even with the same COLA, net results vary based on Medicare premiums, IRMAA, tax withholding, and other deductions. Two people can have the same COLA percentage and still see different net deposits.

Sources

• Social Security Administration press release on the 2026 COLA (2.8%)
• SSA 2026 COLA Fact Sheet (key Social Security changes)
• CMS 2026 Medicare Parts A & B premiums and deductibles (Part B $202.90)
• AARP: Big Social Security changes for 2026 (average benefit estimate)