They Told Him He Got a Raise. His Check Said Otherwise.
A personal story about Social Security COLA, Medicare premiums, and what nobody warns you about.
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Hi everyone,
A friend called me recently, genuinely confused. He'd heard the good news — Social Security was giving out a cost of living raise. COLA, they call it. Cost of Living Adjustment. Sounds reassuring, right? Like someone in Washington actually noticed that groceries cost more and said we've got you.
Except when his check arrived, the raise was gone. Swallowed whole. And he wasn't alone.
Here's what happened — and what nobody warned him about.
The COLA That Wasn't
Every year Social Security announces a COLA (Cost of Living Adjustment) — a raise designed to help seniors keep up with inflation. Sounds like someone in Washington is paying attention, right? For 2026 that bump was about $56 a month for the average retiree. Not life-changing, but something. Meanwhile, Medicare Part B premiums for 2026 jumped to $202.90 a month — a nearly 10% increase from the year before. That $18 premium hike alone eats about a third of the average $56 COLA before it ever touches a bank account. And for seniors dealing with IRMAA surcharges, high prescription costs, or supplemental coverage premiums, the rest can disappear just as fast.
And then there's the trap hiding inside the trap.
The IRMAA Trap Nobody Talks About
It's called IRMAA — the Income Related Monthly Adjustment Amount. If your income crosses certain thresholds, Medicare tacks on an additional surcharge on top of your regular premium. In 2026 that kicks in at $106,000 for a single person. Cross that line by even one dollar and your premiums can jump by hundreds more per month. Cross into a higher bracket and your Medicare costs can spike by over $1,000 per year.
Here's the part that really stings. IRMAA is based on your income from two years ago. So if you had a good year in 2024 — maybe you sold your house, took a retirement withdrawal, or did a Roth conversion — that income follows you into 2026 like a shadow. Even if your situation has completely changed since then.
My friend didn't see it coming. Most people don't. Many seniors feel they "didn't get a raise" even when COLA technically increased their gross benefit. Because in real dollars, in the actual check they hold in their hand — they didn't.
The Formula Is Rigged — And Not for You
Here's something that doesn't get nearly enough attention: COLA isn't calculated based on what seniors actually spend money on. It uses something called the CPI-W — the Consumer Price Index for Urban Wage Earners. That's working people. People buying gym memberships and commuter passes. Not people spending a much larger share of their budget on healthcare, prescription drugs, and housing — which is exactly how most seniors spend their money.
There's an alternative index called the CPI-E — the E stands for Elderly — that tracks spending patterns that actually reflect senior lives. It consistently runs higher than CPI-W. Congress knows it exists. They just haven't acted on it. The difference matters: CPI-W tracks gym memberships and commuter passes — not insulin and home health aides.
COLA isn't designed to keep up with what seniors actually buy. It's designed to look like it does.
And there's a timing problem that makes it worse. COLA is calculated using price data from just July through September of the prior year. So the brutal inflation that ran through 2022 and 2023 — the spike that hit groceries, utilities, and rent hardest — was never fully captured in any single year's adjustment. By the time a raise reflected reality, reality had already moved on.
Between 2010 and 2024, Social Security benefits lost about 20% of their buying power. Read that again. Twenty percent. And now, layered on top of that long-term erosion, is this more recent inflation surge that hit food and housing especially hard. Someone who retired in 2010 now needs hundreds more per month just to maintain the same standard of living they had then — and the gap keeps widening.
And when a health crisis hits on top of that — like the cardiac emergencies our contributor Susan has been writing about in Why an ICD + Pacemaker Is Not an Outpatient Procedure — the financial floor can disappear overnight.
We saw this up close recently. A close friend — someone who worked his whole life, paid into the system, did everything right — found himself one landlord decision away from sleeping in his van. It happened fast and it happens more than people realize. If you missed that story, it's worth your time: We've Been Quiet — And Here's Why. The numbers behind senior housing insecurity are staggering, and the gap between crisis and help is exactly where people fall through.
This isn't just a math problem. It's a dignity problem.
In our own house, gap insurance alone runs close to $200 a month — because with Parkinson's and cancer, we simply can't afford not to have it. That's money that used to mean something else. For a lot of seniors, there is no "something else" left to cut.
When Seniors Try to Help Themselves — And Get Punished for It
When the check doesn't stretch, seniors do what they've always done — they get creative. They rent out a spare room through Airbnb or to a local tenant. They sell things on eBay or at the flea market, turning decades of accumulated life into grocery money. They take a part-time job as a greeter at Walmart or a cashier at a craft store — something that gets them out of the house and puts a little extra in the bank.
It's resourceful. It's dignified. And in many cases, it quietly costs them far more than they earn.
This is what's called the benefits cliff — the point where earning a little more money causes you to lose access to programs worth far more than that income. The math is brutal and it catches people completely off guard.
A few real examples of what's at stake:
Medicare Savings Programs (MSPs) help low-income seniors pay their Part B premiums, deductibles, and co-pays — that's potentially $2,000 to $3,000 or more in savings per year, gone if income nudges above the threshold. There are four tiers of MSP, and crossing even the lowest one can mean absorbing costs you had no budget for.
Extra Help / Low Income Subsidy (LIS) for Medicare Part D covers most or all of prescription drug costs. For seniors on multiple medications, this program can be worth thousands of dollars a year. A part-time job that adds $300 a month to your income could end it entirely.
SNAP food benefits (what most people call food stamps) operate on strict income thresholds. A senior who rents out a room or picks up a few eBay sales in a good month can find themselves just over the line — and suddenly buying all their own groceries again.
Medicaid and Medicaid Waiver programs that cover in-home care, adult day services, and nursing facility costs are among the highest-stakes. Medicaid eligibility rules vary by state but can be extremely sensitive to income changes. Losing Medicaid coverage — even temporarily — can mean losing home health aides or care coordination that a family absolutely depends on.
And here's the cruel irony the system never mentions: the Walmart greeter job that robots and self-checkout kiosks may soon eliminate entirely? For some seniors, keeping it means losing healthcare benefits worth ten times the paycheck. Losing it means losing the income without getting the benefits back automatically.
If you or someone you love is in this situation, the single best thing you can do before taking on extra income is call your State Health Insurance Assistance Program (SHIP) — it's free counseling, specific to your state, and they can run the numbers with you before you accidentally disqualify yourself. Find yours at shiphelp.org or call 1-800-MEDICARE and ask to be connected.
But Here's What You CAN Do
If your income has dropped significantly since that two-year lookback period — retirement, job loss, divorce, death of a spouse — you have the right to appeal. File Form SSA-44 with the Social Security Administration and request a reconsideration based on your current income. It doesn't always work but it absolutely is worth trying and many people don't know it exists.
📞 Call SSA directly: 1-800-772-1213, Monday–Friday 8am–7pm
🔗 Medicare questions: Medicare.gov or 1-800-MEDICARE (1-800-633-4227)
🌐 Benefits, housing, and senior resources: Seniors.gov — one-stop hub for federal programs for older Americans
Make Some Noise — Call Your Senator
The system is complicated by design, it sometimes feels. But knowing these things — talking about them, sharing them — is how we help each other navigate it.
But here's the thing — we shouldn't have to just figure it out. This is fixable. Congress sets these thresholds. Congress can change the CPI formula. Congress can cap Medicare premium increases so they can't swallow a COLA whole. And they will — when enough of us get loud enough.
Because the truth is, seniors are navigating a system that wasn't designed with them in mind — from Medicare billing to something as simple as a TV remote. If you missed our piece on that, it's worth a read: The Remote Fiasco: Accessibility, Aging, and the Amazon Jungle. The frustrations are different but the theme is the same — the system keeps making life harder for the people who've earned easier.
Call or write your U.S. Senator. You don't need a speech. Just say:
Find your Senator in 30 seconds at senate.gov/senators — every office has a phone number and contact form. Calls carry more weight than emails. A real human voice even more so.
My dad used to say the phone is the most powerful tool we have. He used his to cheer people up every week. Maybe we use ours this week to fight for them instead.
My friend is figuring it out. Slowly, with help. That's usually how it goes.
As always — we've got each other.
Much love,
Alrady 💛
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