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Is a Big Cost-of-Living Increase Really a Good Thing? - The Motley Fool
The Cost-of-Living Increase (COLA) grows as inflation grows. Estimates for the COLA increase in 2026 are now rising, with some saying as high as 2.7%. Inflation had started slowing down at the beginning of the year and is now rising again. Social Security recipients have lost about 20% of their buying power over the years. If inflation continues to rise, there is no guarantee it will stop after the COLA is determined, and once again result in less buying power.
The months of July, August, and September of this year are being compared to July, August, and September of last year. July was 2.5% by itself. The actual COLA increased won’t be released until around October 15th.
You also need to take into consideration the rising cost of Medicare. It is estimated that Medicare Part B will be $206.50 in 2026, a $21.50 increase from the current cost of $185. The actual amount will not be released until around mid-November. The average Social Security benefit of $2,000, with a 2.7% COLA, it would increase by $54. When you deduct the Medicare increase of $21.50, it will only be $29.50 increase.
Rising inflation is what increases your Social Security benefit, but may not increase your buying power. To read the full article by Bram Berkowitz in The Motley Fool, click here ….
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