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Is your COLA increase really helping? We break down why your Social Security raise might feel smaller than expected.
Discover how rising Medicare Part B premiums are eating into your annual Social Security Cost-of-Living Adjustment.
The truth about COLA vs. rising healthcare costs. Are you among those most impacted?
#RetireeRealityCheck #MedicareBite #SocialSecurityShortfall

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00:00The Cola Challenge
00:01Why Your Social Security Increase Might Feel Less Than Expected for Many Retirees and Beneficiaries
00:08The Annual Social Security Cost of Living Adjustment is a Mooj Anticipated Announcement,
00:14meant to help keep pace with the rising costs of everyday life.
00:18It's designed to maintain your purchasing power year after year.
00:21However, despite these annual hikes, a common sentiment among seniors is that the increases
00:27often fall short, leaving little extra to cover growing expenses.
00:31So, why does your Social Security increase often feel smaller than expected?
00:36This has led to estimates of a 2.7% COLA for next year, slightly up from a previous estimate
00:42of 2.5%.
00:43For context, the COLA increase for January 2025 was set at 2.5%.
00:50Understanding your COLA, how it's calculated according to the 2025 Medicare Trustees Annual
00:56Report, the Medicare Part B Premium for 2026 is expected to increase significantly, jumping
01:02to $206.50 from $185 in 2025.
01:08She further explains that recipients are quick to note that Part B premiums can frequently
01:13take much, or even all, of the annual COLA, leaving little extra to cover other big cost
01:19increases, such as housing or groceries.
01:22This represents an increase of $21.50 per month, or 11.6%.
01:28It's notable that this is the largest Part B increase since 2022, when it rose by 14.5%.
01:35Those with the lowest Social Security benefits would hurt the most.
01:39If, for example, the COLA in 2026 is 2.7% and the Medicare Part B premium jumps by $21.50.
01:49This increase would take the entire COLA of beneficiaries who receive around $800 or less.
01:56This is especially true for individuals receiving low Social Security retirement, spousal or widow.
02:02Widower's Benefits
02:03First, let's look at how the COLA is determined, and often larger increases in Medicare Part B premiums
02:09can largely or even entirely offset that adjustment for many, particularly those on the lowest benefits.
02:16This creates a challenging financial reality for millions of Americans who rely on these payments
02:21as their primary source of income.
02:23The Social Security Administration calculates the COLA each year based on the average annual increases
02:29in the Consumer Price Index for urban wage earners and clerical workers.
02:33This data is specifically reviewed from July through September, while the CPIW largely reflects
02:39the broader Consumer Price Index, it can sometimes differ slightly.
02:43Based on recent inflation reports, the CPIW gained 2.6% in June, with overall inflation rising
02:502.7% for most Medicare recipients.
02:53The Social Security Administration automatically deducts the Part B premium cost directly from
02:59their Social Security benefits.
03:00This means a bigger Medicare bite means monthly checks will shrink.
03:04The major hurdle, rising Medicare Part B premiums, the primary reason why your Social Security
03:10COLA might not stretch as far as you hope, lies squarely with rising Medicare Part B premiums.
03:16Medicare Part B costs have been rising several times faster than their average rate of increase
03:21in recent years.
03:22As Mary Johnson, an independent Social Security and Medicare policy analyst, points out, it's
03:31not uncommon for Part B premiums to consume much or even all of the annual COLA, leaving
03:36little extra to cover other big cost increases.
03:39This disproportionate increase between COLA and Medicare Part B premiums has a particularly
03:47harsh impact on certain beneficiaries.
03:49In essence, while the Social Security Administration provides a COLA to help you keep up with inflation,
03:55the significant and often larger increases in Medicare Part B premiums can largely, or even
04:01entirely, offset that adjustment for many, particularly those on the lowest benefits.
04:06This creates a challenging financial reality for millions of Americans who rely on these payments
04:12as their primary source of income.

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