Patrick
Roughly 75 million Americans are set to receive a 2.8% cost-of-living adjustment (COLA) to their Social Security and Supplemental Security Income (SSI) benefits in 2026.
While the adjustment will boost monthly payments, other major policy shifts—such as the new senior tax deduction and an increase in Medicare Part B premiums—will influence exactly how much retirees take home next year.
The average Social Security retiree will receive an additional $56 per month, according to the Social Security Administration (SSA).
However, the final amount each person receives will depend on applicable tax deductions, Medicare premium changes, and individual income levels.
Key Updates for the 2026 Social Security COLA
COLA Notices and Distribution Timeline
The SSA will send beneficiaries a one-page notice in early December detailing:
- Exact payment dates for 2026
- New monthly benefit amounts
- Any deductions, including Medicare premiums
Beneficiaries with a My Social Security online account began receiving their COLA details on November 12, and all digital notices will be posted by December 12.
Paper notices start mailing December 1, with all recipients expected to receive them by month-end.
New Senior Deduction: Up to $6,000 in Tax Relief
How the New Deduction Works
Federal taxes can still apply to Social Security benefits, depending on income. A new law passed in July introduces a senior deduction of up to $6,000 for eligible individuals aged 65 and older. This deduction aims to reduce taxable income, which may help lower retirees’ overall tax burden.
However, experts emphasize that the deduction is not a refundable credit.
“It won’t create a dollar-for-dollar refund,” noted Andrew Herzog, CFP and enrolled agent at The Watchman Group. “Its value depends on each person’s tax situation.”
Who Qualifies?
The deduction begins phasing out at:
- $75,000 income for individuals
- $150,000 income for married couples
Full elimination occurs at:
- $175,000 income for singles
- $250,000 income for joint filers
Retirees earning between $80,000 and $130,000 stand to benefit the most, with an estimated average tax reduction of about $1,100.
Estimated Average Monthly Benefits for January 2026
Before and After the 2.8% COLA
| Household Category | Before COLA | After COLA |
|---|---|---|
| All retired workers | $2,015 | $2,071 |
| Aged couple, both receiving benefits | $3,120 | $3,208 |
| Widowed mother + two children | $3,792 | $3,898 |
| Aged widow(er) alone | $1,867 | $1,919 |
| Disabled worker, spouse + children | $2,857 | $2,937 |
| All disabled workers | $1,586 | $1,630 |
| SSI individual rate | $967 | $994 |
| SSI couple rate | $1,450 | $1,491 |
Federal Tax Rules Still Apply
Even with the senior deduction, traditional tax rules for Social Security income remain unchanged.
Taxation Thresholds
- Individuals
- Combined income $25k–$34k: up to 50% taxable
- Above $34k: up to 85% taxable
- Married couples filing jointly
- Combined income $32k–$44k: up to 50% taxable
- Above $44k: up to 85% taxable
Beneficiaries may choose to withhold 7%, 10%, 12%, or 22% from their benefits to cover taxes.
Medicare Part B Premiums Rising Almost 10% in 2026
The cost of Medicare Part B will increase significantly in 2026. The standard monthly premium rises:
- From $185 (2025)
- To $202.90 (2026) — a 9.7% increase
This marks the second-largest premium hike in program history.
Who Pays More?
Higher-income beneficiaries must pay additional Income-Related Monthly Adjustment Amounts (IRMAA). Premiums can reach up to:
- $689.90 per month for individuals earning $500,000+
- $689.90 per month for couples earning $750,000+
Because Medicare Part B is typically deducted from Social Security, the increase may reduce the amount of the COLA seniors ultimately see.
The hold harmless provision prevents the premium increase from fully consuming the COLA for most—but not all—beneficiaries. New retirees and high-income seniors are not protected.
Medicare Open Enrollment Ends December 7
Seniors have until December 7 to review or change their:
- Medicare Advantage plans
- Part D prescription drug coverage
Unlike Part B, premiums for Part D and Advantage plans are not protected by any hold harmless rule, which means they can further reduce monthly Social Security payments.
A second Medicare Advantage enrollment window runs from:
- January 1 to March 31
Experts strongly recommend reviewing plans annually to avoid higher out-of-pocket costs.
The 2.8% COLA will provide meaningful financial support in 2026, but its impact will vary widely depending on taxes, Medicare premiums, and personal income levels.
The new senior deduction, rising Medicare Part B premiums, and ongoing federal tax rules all play critical roles in determining what retirees actually receive.
To maximize benefits, seniors should evaluate their tax withholding options, track Medicare premium changes, and review their healthcare coverage before the enrollment deadline.
FAQs
How much will the average Social Security retiree receive in 2026?
The average retiree will see about $56 more per month, raising the typical benefit to $2,071.
Does the $6,000 senior deduction reduce Social Security taxes directly?
No. It is a tax deduction, not a credit, meaning it lowers taxable income but does not guarantee a refund.
Will Medicare Part B premiums reduce the COLA?
For most beneficiaries, hold harmless protections prevent premiums from fully offsetting the raise, but high-income seniors and new retirees may see reduced net benefits.