{"id":1179957,"date":"2026-09-01T02:03:20","date_gmt":"2026-09-01T02:03:20","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1179957\/"},"modified":"2026-09-01T02:03:20","modified_gmt":"2026-09-01T02:03:20","slug":"social-securitys-cola-bump-may-not-offset-whats-coming","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1179957\/","title":{"rendered":"Social Security’s COLA bump may not offset what’s coming"},"content":{"rendered":"\n

With the Social Security<\/a> Administration’s 2027 cost-of-living adjustment announcement just weeks away, retirees are entering the last stretch of 2026 with a raise that has already been outrun by the forces working against it. <\/p>\n

The 2.8% COLA that took effect in January lifted the average retired worker’s monthly benefit from roughly $2,015 to $2,071 in the SSA’s initial estimate. <\/p>\n

The actual average has since climbed further. As of July 2026, the average retired-worker benefit stood at $2,085.98, according to the SSA’s Monthly Statistical Snapshot<\/a>. <\/p>\n

Medicare premiums surged past the raise, inflation caught up by spring, and the tax code and a decade of eroded purchasing power are still working against the check. <\/p>\n

For the 44% of retirees who depend on Social Security for their entire income, according to the Senior Citizens League<\/a>, the headline amount is only part of the story. What survives deductions and rising costs determines whether the check actually covers the bills. <\/p>\n

Medicare’s 9.7% premium hike consumed nearly a third of the raise <\/p>\n

The standard Part B premium rose to $202.90 a month in 2026, a $17.90 increase from $185, the Centers for Medicare and Medicaid Services<\/a> announced.\u00a0 <\/p>\n

Even against the higher July average of $2,085.98, the Part B premium still represents 9.7% of the monthly check. <\/p>\n

The jump ranks as the second-highest Part B premium increase in program history, trailing only the $21.60 rise in 2022, independent Social Security analyst Mary Johnson told Yahoo Finance<\/a>. <\/p>\n

More Social Security:<\/strong> <\/p>\n

Part B premiums are deducted directly from Social Security checks before each deposit arrives. That means $17.90 of the average $56 raise, roughly 32%, vanished before it reached a single bank account. <\/p>\n

The Part B annual deductible also climbed $26, from $257 to $283, adding another layer of out-of-pocket cost before coverage begins.\u00a0 <\/p>\n

As a share of the average annual Social Security benefit, Part B premiums reached an all-time high of 9.4% in 2026, the Boston College Center for Retirement Research reported<\/a>. <\/p>\n

Purchasing power erosion sits behind 2026 Social Security raise <\/p>\n

The 2026 adjustment arrived against a longer backdrop of declining real value. Benefits have shed 13.7% of their purchasing power since 2016, the Senior Citizens League concluded<\/a> in its 2026 Loss of Buying Power study. <\/p>\n

The problem is structural. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which sets the annual adjustment, tracks working-age spending, the Bureau of Labor Statistics confirmed<\/a>.\u00a0 <\/p>\n

Retirees spend disproportionately on healthcare, a category that consistently outpaces broad inflation. An alternative index<\/a>, the CPI-E, designed to reflect elderly spending patterns, has been proposed for years but never adopted. <\/p>\n

The tax code compounds the problem, dragging more retirees into taxable-benefit territory with every cost-of-living raise. <\/p>\n

The provisional income thresholds, $25,000 for single filers and $32,000 for joint filers, have not changed since 1984, according to the SSA<\/a>. <\/p>\n

Above those levels, up to 50% of benefits become taxable; above $34,000 for single filers and $44,000 for joint filers, up to 85% do. <\/p>\n

Because the thresholds never move but benefits do, each COLA<\/a> pushes more retirees into taxable-benefit territory, enlarging tax bills as it lifts checks. <\/p>\n

“Our research shows that the average senior gets by on less than $2,000 a month,” Shannon Benton, the Senior Citizens League’s executive director, noted in a statement<\/a> to 401(k) Specialist. <\/p>\n

\"\"<\/a> Social Security’s 2026 raise may look helpful, but years of inflation and unchanged tax thresholds continue eroding retirees’ purchasing power.Maskot \/ Getty Images Inflation has outrun the 2.8% adjustment since spring 2026 <\/p>\n

The 2.8% raise was calculated using third-quarter 2025 price data, but inflation has since exceeded that level. The CPI-W rose<\/a> 3.4% year over year in July 2026, the Bureau of Labor Statistics reported.\u00a0 <\/p>\n

Retirees have been absorbing price increases faster than their benefits grew since March, when annual inflation reached 3.3%<\/a>. <\/p>\n

Among categories that weigh heaviest on older households, the mismatch is starker. Outpatient hospital care costs climbed 5.8% year over year through July, the Bureau of Labor Statistics reported<\/a>. <\/p>\n

Douglas Ornstein, a TIAA Wealth Management director, warned in comments to Forbes Advisor<\/a> that small annual gaps between benefit increases and actual costs compound fast. <\/p>\n

“Some critical costs, healthcare in particular, have risen faster than 2.8% over the past year, which means the purchasing power of that benefit continues to erode over time,” Ornstein said. <\/p>\n

\n

For retirees on fixed incomes, even modest gaps between their cost of living and their benefit adjustments can compound meaningfully over a long retirement. <\/p>\n<\/blockquote>\n

The lag is built into the formula itself, since every cost-of-living adjustment reflects the previous year’s prices. <\/p>\n

2027 Social Security COLA projection points to familiar tradeoff <\/p>\n

The Senior Citizens League<\/a> now projects a 3.6% cost-of-living adjustment for 2027, which would add roughly $75 a month to the average check. <\/p>\n

Johnson estimates<\/a> 3.4%, AARP forecasts<\/a> 3.5%, and the Social Security Administration will announce the official figure on Oct. 14, 2026. <\/p>\n

A larger raise would provide some relief, but Medicare<\/a> costs are projected to climb again. The 2026 Medicare Trustees Report<\/a> projects the standard Part B premium at $209.50 for 2027, a 3.25% increase.\u00a0 <\/p>\n

Private forecasters estimate the actual 2027 premium at $216 to $219, citing a pattern of Trustees underestimating final costs in recent years, 24\/7 Wall St reported<\/a>. <\/p>\n

If the premium lands at the higher end of that range, the gap between the raise and the deduction narrows considerably. <\/p>\n

Where the 2027 COLA leaves retirees before it arrives <\/p>\n

The October 14 announcement will confirm whether the 2027 raise clears the projected Part B premium, a spread as narrow as $6 a month if forecasters are right.\u00a0 <\/p>\n

Each COLA continues to lift more retirees across the 1984-era taxation thresholds, expanding tax bills even as it lifts checks.\u00a0 <\/p>\n

Medicare Open Enrollment runs<\/a> from Oct. 15 to Dec. 7, 2026, the annual window when 2027 premiums become available for Medicare Advantage<\/a> and Original Medicare plans.\u00a0 <\/p>\n

In households for which Social Security is the sole income source, the gap between benefit adjustments and healthcare inflation can be significant. That gap may determine whether supplemental income becomes necessary. <\/p>\n

Related: 2027 Social Security COLA: These 3 Months Will Decide Your Raise<\/strong><\/a> <\/p>\n

This story was originally published by TheStreet<\/a> on Aug 31, 2026, where it first appeared in the Retirement<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"With the Social Security Administration’s 2027 cost-of-living adjustment announcement just weeks away, retirees are entering the last stretch…\n","protected":false},"author":2,"featured_media":1179958,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3093],"tags":[45789,103254,18012,51,319891,36474,474,13592,2499,2580,319011,319890,16,15],"class_list":["post-1179957","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-45789","tag-103254","tag-annual","tag-business","tag-citizens-league","tag-cola","tag-finance","tag-medicare","tag-personal-finance","tag-social-security","tag-social-security-cola","tag-social-securitys","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/117193330072838231","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1179957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1179957"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1179957\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/1179958"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1179957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1179957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1179957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}