Key Points
The average retiree will receive around $58 more per month thanks to cost-of-living adjustments (COLAs).
Healthcare premiums could eat away at your benefits, however.
Nearly 30% of retirees depend on Social Security as their only source of retirement income, according to The Motley Fool’s Social Security Cost-of-Living Adjustment survey, and only 5% say they don’t rely on their benefits at all.
Annual cost-of-living adjustments (COLAs) can be a lifeline as everyday costs continue to rise and many retirees struggle to make ends meet. However, there’s a hidden cost that could eat away at your benefits. Here’s what you need to know.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Two people looking at a laptop and documents.
Image source: Getty Images.
How Medicare affects your Social Security
If you’re aged 65 or older, you may qualify for Medicare coverage. While Part A under original Medicare is typically premium-free, retirees will generally pay a premium for Part B coverage.
But how does that affect the COLA? Part B premiums are usually deducted from retirees’ Social Security checks, and because these premiums increase most years, they can take a bite out of your annual raise.
In 2026, beneficiaries received a 2.8% COLA. With the average retiree collecting around $2,075 per month in benefits, according to the Social Security Administration, that amounts to a raise of around $58 per month.
This year, Part B premiums increased by $17.90 per month. So, while the average retiree should be getting a benefit increase of around $58 per month thanks to the COLA, that raise would actually be closer to around $40 per month after Part B premiums are deducted.
Medicare is a necessity for many retirees, so you may not be able to avoid paying Part B premiums. But by factoring this cost into your budget, it can be easier to keep realistic expectations about how far the annual COLAs will go in retirement.
The $23,760 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.
View the “Social Security secrets” »
The Motley Fool has a disclosure policy.
