Every January, Social Security recipients check their new benefit amount and feel brief relief. This year, that feeling probably lasted until the Medicare bill arrived.
The 2026 cost-of-living adjustment came in at 2.8%, which sounds reasonable on paper. For the average retiree, that translated to $56 more per month, lifting the average benefit from $2,015 to $2,071. But Medicare Part B premiums rose at the same time, and the math works against you quickly.
The Part B Premium Ate Nearly a Third of Your Raise
The Medicare Part B premium climbed to $202.90 per month for 2026, a $17.90 increase from last year. Because Part B premiums are deducted directly from Social Security checks, that increase comes off the top before you see the money. For the average retiree, that $17.90 consumed 32% of the entire $56 raise. The Part B deductible also rose to $283 for the year, up $26.
After Medicare, the real net gain for a typical retiree is roughly $38 per month. Energy prices have climbed sharply since the Iran conflict began, pushing gas prices well above where they were a year ago. In practical terms, this year’s COLA raise buys about one tank of gas.
IRMAA Turns a Modest Raise Into a Net Loss
Medicare’s IRMAA surcharge charges higher-income beneficiaries more for Part B. The 2026 thresholds:
| Individual Income | Joint Income | Monthly Part B Premium |
|---|---|---|
| Up to $109,000 | Up to $218,000 | $202.90 |
| $109,001 – $136,000 | $218,001 – $272,000 | $284.10 |
| $136,001 – $163,000 | $272,001 – $326,000 | $394.90 |
| $163,001 – $500,000 | $326,001 – $750,000 | $505.70 |
| Above $500,000 | Above $750,000 | $689.90 |
For a retiree in the second IRMAA bracket, Part B alone costs $284.10 per month for Part B alone — nearly $100 more than the standard premium. A 2.8% COLA cannot meaningfully offset that burden, especially since IRMAA thresholds are based on income from two years prior, meaning a retiree who had a high-income year in 2024 is paying elevated premiums today even if their financial situation has since changed.
What the Inflation Data Actually Shows
The CPI has climbed steadily over the past year, and core PCE — the Fed’s preferred inflation gauge — came in at 3.0% year-over-year as of December 2025, already outpacing the 2.8% COLA. Services inflation, which covers healthcare costs that hit retirees especially hard, has run even higher throughout 2025. In short, the categories that matter most to retirees are rising faster than the adjustment designed to protect them.
One Step Worth Taking Now
If your 2024 income was elevated due to a Roth conversion, property sale, or large required minimum distribution, you can appeal your IRMAA surcharge through the Social Security Administration using a life-changing event appeal. A successful appeal can cut your Part B premium by hundreds per month, far more than anything the COLA delivers this year.
The 2.8% raise is real, but smaller than it looks once Medicare takes its share. How much smaller depends on your income bracket, healthcare costs, and where you live.
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