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- Retirees in America are struggling now — and twist from Social Security in 2026 may make it worse (marketrealist.com)
American Retirees Face Mounting Financial Strain as 2026 Looms with Social Security and Medicare Worries
Across the nation, the escalating cost of living is placing immense pressure on American households, with retirees, in particular, finding it increasingly challenging to make ends meet solely on their Social Security benefits. An affordability crisis continues to grip the country, leaving many seniors struggling to cover basic necessities.
Social Security benefits, designed to provide a financial safety net for retirees, are proving insufficient against the backdrop of persistent inflation and rising costs. A recent report, citing a 2025 study, indicated that a staggering 21.8 million seniors are barely getting by on their Social Security payments alone. Furthermore, two-thirds of all seniors surveyed expressed dissatisfaction with the amount of their monthly checks.
The government’s Social Security cost-of-living adjustment (COLA) program aims to align benefits with the increasing price of goods and services. While beneficiaries received a 2.5% raise in 2025, 94% of them felt this adjustment was inadequate to address their financial struggles.
Looking ahead to 2026, a seemingly positive development shows Social Security benefits are slated for a further 2.8% increase. However, a critical flaw in the COLA calculation method threatens to undermine this anticipated boost, potentially leaving many retirees in a worse financial position.
The formula used to determine COLA increases is based on a basket of goods and services typically purchased by urban wage earners. Crucially, this formula does not factor in the rising cost of Medicare premiums, a significant expense for most seniors.
This oversight is particularly concerning given the projected surge in Medicare costs for 2026. Between 2024 and 2025, the standard premium for Medicare Part B already jumped by approximately $10.30, reaching $185. In 2026, these premiums are set to climb further to $202.90.
This represents a substantial 9.7% increase, requiring retirees to pay more than an additional $17 per month. Consequently, the promised 2.8% COLA increase, which would initially add roughly $56 to monthly benefits, will effectively be reduced to a net gain of just $38.10 after the automatic deduction of higher Medicare premiums. This impact will be particularly acute for retirees without substantial personal savings in accounts like 401(k)s.