2026 Social Security Update: Your COLA is Lower, But Your Medicare Premiums Are Rising

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Welcome to the One of a Kind Financial Show Daily with your host, author, podcaster, educator, founder, and all-around good guy, Mike Milligan. That's me. Happy to see you guys today. Recently, the Social Security Administration, through their internal number crunchers, announced the cost of living adjustment for 2026 that will, that will change some Social Security for millions of Social Security recipients. Over the last 10 years, the average cost of living increase has been 3.1%. Is next year's higher or lower? If I took a poll of 100 people, I think a lot of people would say higher because they're feeling the sting of inflation and half the people will be like, no, the government's stingy. Well, which is it? It's lower. Next year's cost of living adjustment's lower. But that's not the only tweak to Social Security that's around the corner, ladies and gentlemen. Recently on the one-of-a-kind On the One of a Kind financial show that hit the airwaves this past weekend, Gary and I talked about those Social Security tweaks, and I want to give those to you because a prepared person is able to build and execute a one-of-a-kind financial plan so that you can live a one-of-a-kind life. If you want more information about the cost of living adjustment for 2026, text NEWS, N-E-W-S, to 600-700. Ladies and gentlemen, be one of a kind. See you soon.

Well, Social Security doesn't change wholesale often, but in 2026, several important updates are on the table. The taxable wage base increase, COLA, except expectations of benefit taxation pressures, trust fund stress. Now, if we treat Social Security as a static appendix, we may miss strategic moves. Let's talk about the first point we want to make: wage base increase. What do we mean by that?

Well, according to the Social Security Administration, the maximum amount of earnings subject to Social Security tax is expected to increase to $183,600. Now, what that really means is that for high-income earners, people who make over $183,000, any income they make above that, they no longer pay the employer portion of tax on it. But for somebody who made it this year, they're going to be shocked, right? Because the number that was in 20— the number going to 2026 is higher than what it was in 2025. And so there is going to be an increase of Social Security tax payable by individuals in 2026. This is part of the efforts to stabilize the Social Security system because, as we know, by 2020— by 2033, Social Security is expected to run out of money to pay 100% of the benefits. By 2033, they're only going to have enough income coming in to pay 80%. of the current benefits. This increase in, uh, in, in wage base is done to, to help offset some of those potential reductions in the future and to stabilize. Uh, by the way, Gary, I think that this wage base number in the future, maybe 2029, 2030, I think we're going to see this number go up to $300,000 or $400,000.

Oh boy.

Because, because the— if you think about the way Social Security is funded, we always say I paid into the system, so it's my money. But that's not really how Social Security works. You paid into the system to fund the people on the program. Okay.

Yes.

My, the, my Social Security taxes that are being paid now is going to pay people that are currently receiving Social Security. And so in the future, when there's less workers paying for Social Security, uh, recipients That base has got to go up to fund their benefits. And so this is, this is going to look like chump change in what's going to probably come in 2028, 2030, and beyond.

Mm-hmm.

COLA adjustments and net benefit erosion.

So according to recent estimates, the cost of living adjustment could rise by about 2 to 3%. However, there are going to be higher Medicare Part B and Part D premiums that's going to really offset that increase. And so, uh, even though the cost of goods, the cost of bread and milk and prescriptions are going up, many of our Social Security recipients are not going to see an equal cost of living adjustment to their paycheck because Medicare is costing more. Uh, and so because of that Uh, you know, it's going to put a strain on people that are on fixed incomes. That's why it's important for folks to have like a retirement income audit, even if they're in retirement. Where can we get you higher income to spend based off your assets or any adjustments we can make in Social Security? Because the cost of living adjustment doesn't really keep up with what you need to spend because Medicare premiums are also going up.

Mm-hmm.

Right, it's kind of a wash. The show is the one-of-a-kind financial show with Mike Milligan. I'm Gary Nolan, your consumer advocate. Once you get on Mike's calendar, the slots do fill up quickly during the show. Here's that phone number: 800-748-1838. 800-748-1838. Or text the word ideas to 600-700. Benefit taxation complexities.

I could just tell you this, uh, Trump was not able to make Social Security tax-free. He instead, uh, he— so he didn't repeal the tax on Social Security benefits. He basically gave an enhanced standard deduction. So there is, there is some, uh, there is some, uh, timing mechanisms that go on based on the new big beautiful bill about doing Roth conversions now or creating income smoothing techniques. But I'll just tell you guys, on the benefit taxation Uh, they did not become simpler. They actually became more complex as a result of the one big beautiful bill.

That's why you need Mike. All right, earnings test thresholds go up.

So there's higher earnings without penalty limits that allow retirees under, uh, that, that allow retirees to work and still collect. And that happens before they get to full retirement age. And so the higher earnings, uh, we were about in the $21,000, $22,000 range for a while. Now we're about the $25,000 range. So if you're under full retirement age, which if you're born after 1960, it's 67 years old. People born in 1960, 1959, 66 and 10 months at this point. So full retirement age folks can still collect Social Security starting at 62, but the, the, the earnings without a penalty has increased a little bit to closer to $25,000.

All right, good stuff, Mike. Great information. Up against the clock, tell us about the one-of-a-kind financial plan.

Well, Social Security changes are going to be, uh, rampant over the next 10 years because they need to shore up the system. And these little tweaks can have significant impacts in your retirement income plan. And so if you have not called us to create a one-of-a-kind financial plan for you, you need to reach out to us. Uh, and maybe some of you called and we just haven't been able to connect yet. Try us again. Text us again. So, because you know you need help navigating all the changes coming from Washington these days. So let's get together and build the one-of-a-kind financial plan centered around taxes, retirement income, investments, long-term care, and legacy. Because guys, you are unique and we want to build a plan based for you. So, the one-of-a-kind financial plan is about you so you could live a one-of-a-kind life.

800-748-1838. 800-748-1838. Or text the word ideas to 600-700.

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