You've probably already seen the headlines or gotten that official-looking letter in the mail. For 2026, the Social Security Administration officially bumped up benefits by 2.8%. On paper, it sounds like a win.
But if you’re looking at your bank account this January and wondering where that "extra" money went, you aren't alone. It's a bit of a shell game.
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Basically, while the what is the social security increase this year question has a simple numerical answer—2.8%—the reality of what actually hits your pocket is way more complicated. For most retired workers, that 2.8% translates to roughly $56 more per month. The average check is moving from $2,015 up to about $2,071. It's something. But is it enough to cover a bag of groceries or a tank of gas? Barely.
The 2.8% COLA: How the Math Actually Works
The Social Security Administration doesn't just pull these numbers out of a hat. They use something called the CPI-W. That’s the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Every year, they look at the prices of things like milk, eggs, and rent during the third quarter (July, August, and September). They compare those numbers to the same time last year. If prices went up, you get a Cost-of-Living Adjustment, or COLA.
This year's 2.8% is actually a slight step up from the 2.5% we saw in 2025. It’s a return to "normalcy" after those massive, eye-popping jumps of 5.9% and 8.7% we had during the high-inflation chaos of 2022 and 2023. Honestly, those big raises were a double-edged sword. They felt great until you realized you were paying double for eggs.
Here is the breakdown of the major changes for 2026:
- Social Security & SSDI: Up 2.8% starting in January.
- SSI (Supplemental Security Income): Also up 2.8%, but those payments actually started arriving on December 31, 2025.
- Maximum Benefit: If you were a high earner your whole life and wait until age 70 to claim, the max monthly check is now a staggering $5,251.
- The Taxable Limit: For the workers out there, the amount of your salary subject to Social Security tax jumped to $184,500.
Why the Medicare "Gulp" Is Eating Your Raise
Here is the part most people get wrong. You see a 2.8% increase and think your whole check grows by that much. Then you see your net payment and realize it's barely budged.
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Why? Because of Medicare Part B.
Most people have their Medicare premiums deducted directly from their Social Security check. For 2026, the standard Medicare Part B premium climbed from $185 to **$202.90**. That’s a $17.90 hike.
If your Social Security raise was $56, but Medicare just took $18 of it, your "real" raise is only $38. It’s frustrating. It feels like the government gives with one hand and takes with the other. For those with smaller monthly checks, the Medicare increase can sometimes swallow the entire COLA.
The Earnings Test: Working While Retired
If you’re under your Full Retirement Age (FRA) and still working a side gig, keep an eye on the new limits. The SSA doesn't let you earn unlimited money without "penalizing" your benefits—though you do get that money back later in life.
For 2026, if you are younger than your FRA all year, you can earn up to $24,480. For every $2 you earn over that, they take $1 back from your benefits.
If you’re hitting your FRA in 2026, the limit is much more generous: $65,160. After that, you can earn as much as you want without them touching your Social Security. It’s a weird rule, but it’s the law.
A Hidden Tax Break for 2026
There is actually some rare good news on the tax front this year. A new provision, often called the "One Big Beautiful Bill" in policy circles, introduced a specific deduction for seniors.
If you are 65 or older by the end of 2025, you might be able to slice up to $6,000 off your taxable income. This is huge because, for years, more and more seniors have been getting hit with taxes on their Social Security benefits. This new break helps offset that "bracket creep" where a COLA raise accidentally pushes you into a higher tax bracket.
What You Should Do Right Now
Don't just wait for the bank statement to see what happened. Take ten minutes to log into your "my Social Security" account at ssa.gov.
The agency started sending out those one-page COLA notices in December, but they’re also available in your online message center. This notice is the only place where you can see your exact new number, including the Medicare deduction.
If the 2.8% isn't cutting it—and for 77% of seniors in recent surveys, it isn't—it might be time to look at the tax side of things. Talk to a pro about that new $6,000 deduction. Also, double-check your Medicare plan. Sometimes switching to a different Part D or Medicare Advantage plan during the next enrollment period can save you more than a 2.8% raise ever could.
The bottom line: The what is the social security increase this year amount is 2.8%, but your net pay is a different story. Keep a close eye on the Medicare Part B deduction of $202.90, as that is the primary reason your check might look smaller than the math suggests.
To make sure you’re getting every penny, confirm your 2026 benefit amount on the official SSA portal and adjust your 2026 tax withholdings to account for the new senior deduction.