Personal Finance
Social Security 2026 benefit amounts will be affected by these changes
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About 75 million Americans will see a 2.8% cost-of-living adjustment to their Social Security and Supplemental Security Income benefits in 2026.
The increase is expected to add $56 per month on average to Social Security retirement benefits, according to the Social Security Administration.
But other changes — particularly a new tax deduction for seniors and rates for Medicare Part B premiums — will affect the final amount retirees see in their monthly checks starting in January.
The Social Security Administration is will send beneficiaries a one-page statement starting in early December with “exact dates and dollar amounts” of new monthly benefits for 2026, as well as any deductions, according to the agency.
The cost-of-living adjustment notice was available online for beneficiaries who have a My Social Security account starting Nov. 12, with all notices scheduled to be available online by Dec. 12, according to an SSA spokesperson. Paper statements will be sent in the mail starting Dec. 1, with all beneficiaries slated to receive their statements by the end of December, the spokesperson said.
To make the most of the inflation adjustment, beneficiaries need to consider how changes may influence their 2026 monthly checks.
New senior ‘bonus’ aims to curb taxes on benefits
Social Security benefits are still subject to federal taxes, depending on income.
But legislation passed in July provides a senior “bonus” of up to $6,000 for qualifying individuals aged 65 and over to help curb those taxes.
Most retirees won’t notice the change until tax filing season, because the $6,000 is provided through a deduction. Those eligible won’t necessarily see that $6,000 in their refunds.
“It won’t be a dollar for dollar savings like a credit would be,” said Andrew Herzog, a certified financial planner and enrolled agent at The Watchman Group in Plano, Texas. “It’ll just be on a case-by-case basis, how much it’s actually going to save you.”
Notably, not everyone will be eligible for the new senior deduction. It begins to phase out for individuals with $75,000 in income and married couples with $150,000. Singles with $175,000 in income and couples with $250,000 will see no benefit from the change, according to the Urban-Brookings Tax Policy Center.
Those who benefit the most will be seniors who earn between $80,000 and $130,000, who would see an average tax cut of about $1,100, the Urban-Brookings Tax Policy Center estimated.
Some beneficiaries might see less of a benefit from the change than they expect, particularly if their incomes are low enough that they are not paying much tax to begin with, according to Joseph Rosenberg, senior fellow at the Urban-Brookings Tax Policy Center.
Existing federal tax rules are still in effect for Social Security benefits. Benefits may be taxed based on beneficiaries’ combined income, or the sum of adjusted gross income, nontaxable interest income and half of annual Social Security benefits.
Up to 50% of individuals’ benefits are taxed if their combined income is between $25,000 and $34,000, and up to 85% is taxable for more than $34,000.
As much as 50% of Social Security benefits are taxable for married couples who file jointly with between $32,000 and $44,000 in combined income, and up to 85% is taxable for income above $44,000.
Beneficiaries can plan for those levies by requesting to withhold taxes from their monthly payments. They may choose withholding rates of 7%, 10%, 12% or 22%.
The new senior deduction may reduce some taxpayers’ liability for 2026, which means it may make sense to reduce withholdings on benefits or other income, according to Ron Johnson, a certified financial planner and wealth planner at Baird.
“There would be some math involved to try and get it right,” Johnson said.
For example, a tax professional may use your prior tax liability and estimated tax liability for 2026 to help find the target percentage to withhold from Social Security, he said.
While the new senior deduction went into effect in 2025, it is late in the year to make adjustments now based on that change, according to Johnson.
Medicare Part B premiums to jump nearly 10%
To cover healthcare services, new 2026 premiums for Medicare Part B are poised to take a bigger bite out of beneficiaries’ checks in 2026.
The standard monthly Part B premium will climb 9.7% in 2026 to $202.90, up from $185 in 2025 — the second highest increase in the program’s history, according to Mary Johnson, an independent Social Security and Medicare analyst. That rate applies to individuals whose yearly income in 2024 was $109,000 or less, and married couples who file taxes jointly with income of $218,000 or less.
Individuals and couples with modified adjusted gross incomes above those thresholds will pay higher Medicare Part B premium rates. This is due to what is called income-related monthly adjustment amounts, or IRMAA.
Medicare Part B premiums are typically deducted directly from Social Security benefit checks, possibly reducing the cost-of-living boost beneficiaries will see in their monthly payments.
But a hold harmless provision prevents Medicare Part B premiums from wiping out beneficiaries’ COLAs entirely. Yet some beneficiaries are excluded from that protection, such as new retirees and those with higher incomes who pay more than the standard premium, according to the Senior Citizens League, a nonpartisan senior group.
Beneficiaries who have seen their income decline, particularly due to a qualifying life-changing event, may notify the Social Security Administration of the change to have their Part B premium rates adjusted.
This year’s premium rates are based on modified adjusted gross income from the latest tax return, typically for the prior two tax years.
Because selling your home before retirement can kick up Medicare premiums later, it’s wise to plan for how tax income thresholds may shape your retirement spending later, Herzog said.
“It’s becoming increasingly common that now tax planning should be table stakes,” Herzog said. “For any client who has an advisor, they need to be getting into the weeds.”
Medicare open enrollment ends Dec. 7
Social Security beneficiaries may also have other premiums for Medicare Part D prescription drug coverage or private Medicare Advantage insurance deducted from their monthly checks.
Unlike Medicare Part B, there is no hold harmless provision for the Medicare Advantage and Part D deductions, according to Johnson. So those premiums may reduce Social Security benefits, she said.
Medicare beneficiaries have until Dec. 7 to shop around for coverage, which can help limit the prices they pay for care in 2026.
During this window, beneficiaries may switch from original Medicare, including Parts A and B, to Medicare Advantage, or vice versa; change Medicare Part D prescription plans; or opt for a different Medicare Advantage plan that may or may not include drug coverage.
A Medicare Advantage open enrollment period from Jan. 1 to March 31 lets beneficiaries switch Advantage plans or drop their Advantage plan for original Medicare. Special enrollment periods may also be available during the year, depending on individual personal circumstances.
But beneficiaries have the most flexibility during this annual enrollment period, according to Ryan Ramsey, associate director at the National Council on Aging. In particular, everyone can now compare their standalone Part D plan or Medicare Advantage drug coverage to make sure it suits their needs and costs them the least for the following year, he said.
“Anyone who has Medicare in any form or fashion should do a comparison during this time each year,” Ramsey said. “It’s always a great practice, even if you have no intention of switching plans.”
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