The average Social Security check hit $2,071 monthly in January 2026 with a 2.8% COLA.
Medicare Part B premiums rose to $202.90 per month from $185. This consumes nearly one-third of the average COLA increase.
Claiming Social Security at 62 permanently reduces benefits by approximately 30% compared to full retirement age.
A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here.
Social Security benefits crossed a symbolic milestone in January 2026, with the average monthly check reaching $2,071. The 2.8% cost-of-living adjustment represents the mechanism designed to protect retirees from inflation, yet many beneficiaries find the increase barely keeps pace with their actual expenses.
Medicare Part B premiums jumped to $202.90 per month this year, up from $185 previously. This increase alone consumes nearly one-third of the average COLA boost, leaving minimal room for retirees to address rising costs in food, utilities, or prescription drugs.
The Senior Citizens League projects the 2027 COLA at just 2.5%, signaling a continued slowdown from the larger adjustments seen in recent years. This matters because Social Security typically represents half or more of income for most retirees, meaning slower benefit growth directly erodes purchasing power when healthcare and housing costs continue rising.
Dividend-paying stocks offer growth that significantly outpaces Social Security’s annual adjustments of around 2.5% to 2.8%. Many established dividend payers have increased their payouts by double digits in recent years, creating a compelling case for supplemental income. High-yield sectors like telecommunications and energy can help bridge the gap between Social Security and actual expenses.
Consider Verizon (VZ), which offers a 6.77% dividend yield, or Bristol-Myers Squibb (BMY) at 4.67%. Chevron (CVX) provides a 4.13% yield, while PepsiCo (PEP) delivers 3.99%. Johnson & Johnson (JNJ) rounds out a diversified approach with a 2.49% yield. A modest portfolio focused on these five dividend payers can generate several thousand dollars annually in supplemental income, but this strategy requires careful tax planning. Additional dividend income can trigger taxation on Social Security benefits once combined income crosses certain thresholds, making it essential to model the net benefit before adjusting investment strategies.
The hardest mistake to undo is claiming Social Security too early. Benefits claimed at 62 are permanently reduced by roughly 30% compared to full retirement age, and that reduction compounds over decades of retirement. When combined with modest COLA increases that apply to a smaller base benefit, early claiming can leave retirees significantly behind.
Before adjusting your strategy, calculate how much of your Social Security is already taxable and whether additional dividend income would push you into a higher tax bracket. Small differences in timing and income sources can meaningfully affect your long-term financial security, making it worth reviewing your specific situation carefully.
Most Americans drastically underestimate how much they need to retire and overestimate how prepared they are. But data shows that people with one habit have more than double the savings of those who don’t.
And no, it’s got nothing to do with increasing your income, savings, clipping coupons, or even cutting back on your lifestyle. It’s much more straightforward (and powerful) than any of that. Frankly, it’s shocking more people don’t adopt the habit given how easy it is.
