Retired? You May Want to Go Back to Work in 2026. Here's Why.

For many older Americans, 2026 is shaping up to be a financially challenging year. If you're worried about being able to cover your bills in the new year, one thing it pays to consider is returning to work in some capacity. Here are some of the reasons a part-time job might improve your finances substantially.

1. Social Security benefits aren't rising by much

Many retirees get the bulk of their monthly income from Social Security. In 2026, benefits are getting a 2.8% cost-of-living adjustment, or COLA. And while that's certainly not the stingiest COLA benefits have received to date, it's also not particularly generous.

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The Social Security Administration estimates that following that 2.8% COLA, the average retirement benefit should increase by $56, going from $2,015 to $2,071. But that may not do very much for you if it's already a struggle to keep up with your expenses and you don't have much income outside of Social Security.

2. Medicare costs are going up

Many older Americans get health coverage through Medicare. And in 2026, Medicare costs are rising across the board.

The standard monthly Medicare Part B premium is increasing from $185 to $202.90 for 2026. For people who pay their Part B premiums out of their Social Security checks, that extra $17.90 will whittle down the aforementioned COLA substantially. Meanwhile, the annual deductible for Medicare Part B will be $283 in 2026, up from $257 in 2025.

Medicare Part A costs are going up as well. Though most enrollees don't have to pay a premium for Part A coverage, if you're admitted for a hospital stay, you'll face a $1,736 inpatient deductible, up from $1,676 in 2025.

The daily coinsurance rate for a hospital stay is also increasing from $419 in 2025 to $434 in 2026. And the daily coinsurance rate for a skilled nursing facility is increasing from $209.50 to $217.

It's not so unusual for Medicare costs to rise from one year to the next. But the upcoming Part B increase in particular is pretty substantial.

Now if you have a Medigap plan, you may be somewhat protected from some of these cost increases. If not, you should seriously contemplate a return to work to drum up more income in case you end up with large healthcare bills.

3. Inflation could continue to batter consumers

Inflation has been stubbornly high these past few years. And with tariffs continuing to impact consumers, costs have the potential to increase even more in 2026.

If you're retired, you may also be aware that healthcare inflation tends to outpace general inflation -- meaning, the cost of medical care might increase faster in the new year than other expenses of yours. That's all the more reason to boost your income with a job.

Working as a retiree could be a rewarding experience

When we talk about going back to work in retirement, you might initially picture yourself holding down a retail job or doing admin work in an office. But thanks to the gig economy, working can be a more flexible and rewarding experience for you.

You may be able to turn a hobby you enjoy into a job, whether it's crafting, baking, or woodworking. You may find a job working with animals or teaching your favorite instrument.

It pays to explore your options for part-time work before assuming it'll be a miserable experience -- especially if you're worried about your minimal Social Security COLA, rising Medicare costs, and inflation. That steady income could alleviate a lot of financial stress -- and give you more options for spending money to enjoy the upcoming year to the fullest.

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