How COLA Helps — and Its Limitations

A COLA increase is meant to protect retirees and others on fixed incomes from rising prices. In practice, this year’s 2.8 percent boost adds roughly $50–$60 more per month for the average recipient compared to 2025.

However, some retirees may see part of that benefit offset by higher costs for Medicare Part B premiums, which are deducted from Social Security checks at the source.

A new senior tax deduction also took effect for tax filings starting in 2026, potentially reducing the federal income tax owed on Social Security benefits for many Americans aged 65 and older.