"A retiree receiving $2,000 per month from Social Security saw their check increase by $56 in January 2026 thanks to the 2.8% cost-of-living adjustment. On paper, that looks like protection against inflation. In reality, healthcare premiums alone ( Medicare Part B and supplemental insurance combined) consumed over $40 of that raise, and grocery and utility bills climbed on top of that. By month's end, that $56 felt more like $10."
"From 2024 Q1 to 2025 Q3, the household savings rate dropped from 6.2% to 4.2% - people are spending more of their income just to maintain the same standard of living. That pressure is uneven: housing costs grew 2.91% while healthcare jumped 6.91% over the past year. A retiree with a paid-off home might escape housing pressure, but nobody escapes healthcare inflation. Prescription drugs, doctor visits, and out-of-pocket expenses all climb faster than the COLA check grows."
"The Healthcare Gap That COLA Misses Healthcare costs are rising far faster than the inflation measure used to set COLA. Over the past year, healthcare spending grew 6.91% - roughly 1.5 times the pace of overall consumer spending. The gap between what retirees spend and what COLA covers is not a rounding error. It is structural. For retirees on fixed incomes, healthcare expenses represent the single largest threat to long-term purchasing power, growing at a pace that consistently outstrips annual COLA adjustments."
A 2.8% COLA raised a $2,000 Social Security benefit by $56, but Medicare Part B and supplemental premiums consumed over $40 of that increase, leaving minimal net benefit after groceries and utilities rose. The inflation measure used to set COLA tracks working-age spending patterns, not retiree spending dominated by healthcare. Healthcare spending rose 6.91% over the past year, about 1.5 times overall consumer spending, while housing grew 2.91%. Household saving rates fell from 6.2% to 4.2% between 2024 Q1 and 2025 Q3. Small annual COLA shortfalls compound over decades into substantial lost purchasing power.
Read at 24/7 Wall St.
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