The news coming out of Washington for older Americans is both sweet and sour this year.
2026 is shaping up to be a big year for Social Security recipients, with some welcome changes and some that are not so welcome. If you’re not intimately familiar with the latest updates on Social Security, there’s both good and not-so-good news.
Let’s start with the not-so-good news, just to get it out of the way.
Image source: Getty Images.
Not-so-good news: The government giveth and taketh away
The big reveal last October was a 2.8% cost-of-living adjustment (COLA) for Social Security recipients. While few retirees could say that 2.8% was enough to keep pace with inflation, even fewer could pretend to be happy about what came next — news that the cost of Medicare was going up.
On Nov. 14, the Centers for Medicare & Medicaid Services announced that the cost of Medicare Part B, which covers doctor visits and outpatient care, would increase by 9.7%. Rather than paying $185 a month for the coverage, recipients would have $202.90 deducted from their Social Security benefits each month.
Let’s say you’ve earned enough work credits to receive $2,000 per month in benefits. After the COLA, your benefit would be bumped to $2,056. Once you factor in the higher cost of Part B, that $56 increase would be slashed to $38, for an overall net gain of 1.9%. While receiving a COLA is better than nothing at all, 1.9% may not stretch quite as far as you need to catch up with inflation.
Good news: A sweet tax break for older Americans
If you’re currently working on your taxes, you’ve seen the new tax break for people 65 and older. A new deduction reduces taxable income by up to $6,000 for eligible taxpayers, seriously cutting into the amount of tax they’ll owe. If you’re one of those eligible taxpayers, you may see a larger-than-usual tax refund this year.
To sweeten the pot even more, the standard deduction (the one anyone can take) increased this year. Here’s how:
Standard Deduction
Single or Married Filing Separately
Married Filing Jointly or Surviving Spouses
Heads of Household
2025
$15,750
$31,500
$23,625
2026
$16,100
$32,200
$24,150
Data source: IRS. Chart by author.
If you meet the criteria, you can add $6,000 to the updated deduction amount. If you’re married and you both meet the criteria, that’s an extra $12,000.
Eligibility criteria
Most Americans aged 65 and older will qualify for the full $6,000 deduction, while some will receive less due to their incomes. Here’s what it takes to be eligible:
- You must have turned 65 on or before Dec. 31, 2025.
- You must file as an individual, married couple filing jointly, surviving spouse, or head of household.
- You can claim the deduction whether or not you itemize on your return.
- For individual filers, the deduction is reduced if your modified adjusted gross income (MAGI) exceeds $75,000. It’s phased out entirely if your MAGI is $175,000 or more.
- For couples filing jointly, the deduction is gradually reduced if your MAGI is $150,000, and completely phased out if your MAGI reaches $250,000.
If a grandparent or parent ever said to you, “You must learn to take the sweet with the sour,” they knew what they were talking about. This year’s tax news is an interesting mix of sweet and sour. That said, you shouldn’t get used to this new senior deduction, as it’s scheduled to run through the 2028 tax year only. In the meantime, there’s no reason not to enjoy it.
