AARP Warns of Major Social Security, Medicare Changes in 2026

UPDATE: AARP has issued a critical alert regarding significant changes to Social Security and Medicare set to take effect in January 2026. These adjustments will impact millions of Americans, making it essential for beneficiaries to prepare for shifts in their financial landscape.

As retirement evolves, so do financial priorities. AARP emphasizes that 2026 will bring substantial changes to Social Security benefits and Medicare costs, leaving many retirees feeling uncertain. “This dynamic new chapter comes with its own twists and turns,” AARP states, urging individuals to stay informed.

Social Security beneficiaries can expect a 2.8% increase in their payments, translating to an average monthly check rising from $2,015 to $2,071. This increase is tied to shifts in consumer prices observed between the third quarter of 2024 and the third quarter of 2025. Survivor benefits will also see a boost, with payments for widowed spouses climbing from $1,867 to $1,919.

AARP highlights that the impact of this increase will largely depend on inflation trends in 2026. If inflation continues to rise, beneficiaries may struggle to keep up with their expenses, despite the new adjustments. Cameron Huddleston and Deirdre Shesgreen from AARP emphasize, “If prices continue to climb, the COLA may leave beneficiaries struggling to manage their expenses.”

In addition to Social Security changes, Medicare premiums are set to increase significantly. The standard monthly premium for Medicare Part B will rise to $202.90, a jump of $17.90 from $185.00 in 2025. The annual deductible for Medicare Part B will also increase to $283, up by $26 from $257.

AARP notes that those with Medicare Advantage plans may see varied costs. Interestingly, the average monthly premium for these plans is projected to decline, decreasing from $16.40 in 2025 to $14.00 in 2026. Meanwhile, the average premium for a stand-alone Part D prescription plan is expected to drop to $34.50, a reduction of $3.81.

Retirement savings will also experience changes in 2026. The IRS is raising the contribution limit for IRAs to $7,500, an increase from $7,000 in 2025. For individuals aged 50 and older, the catch-up contribution rises to $1,100, allowing a total contribution of $8,600.

For workplace retirement plans like 401(k) and 403(b), the contribution limit for workers under 50 will be $24,500, up by $1,000 from 2025. Those aged 50-59 can contribute up to $32,500, while workers aged 60-63 qualify for a “super catch-up” contribution of $11,250, leading to a total of $35,750.

These upcoming changes underscore the importance of financial planning as Americans approach retirement. With less than three years until these adjustments take effect, AARP urges individuals to prepare and adapt to the evolving landscape of retirement benefits.

Stay tuned for more updates as the situation develops, and ensure you are ready for the financial shifts that will impact your retirement experience.