Change #2 Medicare Part B Premiums Offset the COLA Gain
What Changed
While the 2.8% COLA represents a meaningful increase in gross Social Security benefits, a significant portion of that increase is immediately offset by the rise in Medicare Part B premiums — which are automatically deducted from Social Security checks for most Medicare enrollees.
In 2026, the standard monthly Medicare Part B premium increased from $185.00 in 2025 to $202.90 — a jump of $17.90 per month, representing a nearly 10% increase in Part B costs in a single year. The annual Part B deductible also increased, rising from $257 in 2025 to $283 in 2026, an increase of $26.
The math of the offset is straightforward and sobering. The average retired worker’s Social Security check increased by approximately $56 per month due to the 2.8% COLA. But $17.90 of that increase is immediately absorbed by the higher Part B premium, leaving a net effective monthly increase of roughly $38.10. That means nearly 32% of the COLA increase for the average retiree is consumed by the Medicare Part B premium hike before it reaches their bank account.
The IRMAA Surcharge — A Hidden Tax on Higher-Income Retirees
For retirees with higher incomes, the Medicare cost picture is considerably more expensive. The Income-Related Monthly Adjustment Amount (IRMAA) imposes surcharges above the standard Part B premium for individuals whose Modified Adjusted Gross Income (MAGI) exceeds certain thresholds.
In 2026, the IRMAA surcharge kicks in for individuals with MAGI above $109,000 (single filers) and $218,000 (joint filers). Depending on income level, Medicare Part B premiums with IRMAA surcharges can range from $284.10 to $689.90 per month — substantially higher than the standard rate.
Key Insight: The net real-world increase for the average Medicare-enrolled retiree in 2026 is approximately $38.10 per month — not the $56 gross COLA figure. When planning retirement income needs, always calculate Social Security benefits on a net basis after Medicare Part B premiums.
What about the money that the government borrow from Social Security, that never got paid back?
Always Honored: Every single time Social Security has needed to “cash in” those bonds to pay benefits, the Treasury has paid them in full. The government has never defaulted on these payments. This is a myth or conspiracy theory that the loans have not been paid back.
As citizens we must plan ahead. Hells bells! Ive been working since a teenager, went to college nights. I have basically worked my ass off my entire life. Even thru losing 2 houses during my divorce at age 37 and starting all over again financially, I still managed to help my 2 kids become very independent with one getting her PhD paid off at age 33 w all her scholarships etc, and the other serving the military then bachelor’s degree. Both very successful buying homes by age 30 or before. Then I retired from my state job at 55 collecting that pension, creating code approved basement apartment, other rentals I have created and back to work full time at age 60 for non state work to make extra money for big house projects and travel. Try to stay healthy w exercise and eating right most of the time. Now I intend to work full time til age 67 at least. Im single and loving it. I make close to $100,000 a year with all my different sources of income I created. My 60s are now for full time work w lots of vacations/travel plans and big house projects. I dont plan on collecting soc sec til I’m age 70 for maximum payout. Might work part time then.
Not true, the government did not put that money back,