2026 COLA Pushes Social Security Checks To All Time High, But It's Still Not Enough

"Social Security benefits crossed a symbolic milestone in January 2026, with the average monthly check reaching $2,071. The 2.8% cost-of-living adjustment represents the mechanism designed to protect retirees from inflation, yet many beneficiaries find the increase barely keeps pace with their actual expenses. Medicare Part B premiums jumped to $202.90 per month this year, up from $185 previously. This increase alone consumes nearly one-third of the average COLA boost, leaving minimal room for retirees to address rising costs in food, utilities, or prescription drugs."

"Dividend-paying stocks offer growth that significantly outpaces Social Security's annual adjustments of around 2.5% to 2.8%. Many established dividend payers have increased their payouts by double digits in recent years, creating a compelling case for supplemental income. High-yield sectors like telecommunications and energy can help bridge the gap between Social Security and actual expenses. Consider Verizon (VZ), which offers a 6.77% dividend yield, or Bristol-Myers Squibb (BMY) at 4.67%."

"The Senior Citizens League projects the 2027 COLA at just 2.5%, signaling a continued slowdown from the larger adjustments seen in recent years. This matters because Social Security typically represents half or more of income for most retirees, meaning slower benefit growth directly erodes purchasing power when healthcare and housing costs continue rising. A modest portfolio focused on these five dividend payers can generate several thousand dollars annually in supplemental income, but this strategy requires careful tax planning."

Average Social Security monthly benefit reached $2,071 in January 2026, supported by a 2.8% cost-of-living adjustment. Medicare Part B premiums increased to $202.90 per month from $185, consuming nearly one-third of the average COLA increase. The Senior Citizens League projects a 2027 COLA of about 2.5%, indicating slower benefit growth ahead. Social Security typically constitutes half or more of income for most retirees, amplifying the impact of slower benefit growth on purchasing power as healthcare and housing costs rise. Dividend-paying stocks and high-yield sectors offer higher income growth, and selected dividend payers can produce supplemental income, but added dividends can affect Social Security taxation and require tax planning.

Read at 24/7 Wall St.