Social Security just announced a 2.8% cost-of-living adjustment (COLA) for 2026. That means the average retired workers benefit will go up by about $56 a month, from roughly $2,015 to $2,071. Married couples who both receive benefits will see an average increase of about $88 a month, from $3,120 to $3,208.[1]
On paper, that sounds helpful. But if youre feeling like prices are still climbing faster than your checks, youre not imagining it. Everyday costsespecially Medicare premiums, prescriptions, groceries, and housingcan easily swallow a big chunk of that raise.
Heres how Id approach this new COLA as a practical, 50s-and-60s household:
- Give every new dollar a job. Before the increase hits your account in January, decide where it will go: Medicare premiums, prescriptions, debt payments, or a small emergency fund top-up.
- Run a fresh 2026 budget. Update your monthly numbers for utilities, insurance, food, and gas. Treat this COLA as a way to keep your plan realistic, not as extra spending money.
- Check your tax withholding. Higher benefits can slightly change your tax picture, especially if you have other income (pensions, part-time work, or IRA withdrawals).
- Coordinate with your spouses benefits. If youre a couple, look at both checks together. Sometimes it makes sense for one spouse to delay claiming a bit longer to lock in a higher benefit, even as COLAs roll in.
The big picture: a 2.8% COLA helps, but it doesnt replace having a clear plan for cash flow in retirement. Use this change as a reminder to review your budget, your withdrawal strategy, and your Medicare choices for 2026.
Source: Social Security Administration 2026 COLA Fact Sheet.
