3 Reasons Your January Social Security Payment Looks So Different

The first round of Social Security benefit payments for 2026 went out on Jan. 14. If you have already received your monthly benefit, you may notice it looks a bit different than it did in December.

Retirees set to receive their benefits later this month (the government sends them out in three tranches based on what day of the month you were born) shouldn't be shocked to see quite a different figure hit their bank account.

There are several reasons your benefits could change. Some will affect every recipient, while others will affect only a relatively small group of seniors. Here are three of the biggest reasons your January payment might look so different from what you received last month.

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1. The 2026 COLA just took effect

Everyone eligible for Social Security saw an increase in their benefit (or potential benefit) this month thanks to the annual cost-of-living adjustment, or COLA, which is based on a standard inflation measure, the CPI-W. The Social Security Administration (SSA) calculates the average inflation rate for the third quarter of the year and sets that figure as the COLA for the following year. The 2026 COLA increased retirement benefits by 2.8%.

The good news for retirees is that the most recent CPI reading for December showed prices increased only 2.7% last month. The bad news is that many are still finding the annual COLA isn't enough to keep up with the increase in the costs they face. Many prices that are more heavily weighted in seniors' budgets, such as housing and utilities or medical care, are increasing faster than the overall inflation rate.

With the average retirement benefit reaching $2,013 in November, the COLA will increase the average payment about $56 in January.

2. Medicare premiums went up

If you're enrolled in both Social Security and Medicare, the SSA will automatically deduct your monthly Medicare Part B premium before sending your payment. If you applied for Social Security at least four months before you turn 65, the government will automatically enroll you in Medicare and start deducting premiums from your check once you become eligible for the insurance program.

The government adjusts the monthly premium each year to cover the expected costs of the medical services it provides. Most Medicare enrollees will see this year's Part B premium increase $17.90 per month to $202.90. Those with incomes greater than $109,000 for individuals or $218,000 for joint filers will have to pay more.

The increase in the standard Medicare Part B insurance premium is bigger than the annual COLA -- 9.7% versus 2.8%. As such, many retirees won't see as big a boost in their monthly payment as they might have expected based purely on the COLA calculation. The Medicare trustees also expect the monthly premium increase to outpace the COLA for many years to come.

3. You're still working

With many seniors finding the COLA isn't enough to keep up with rising costs, including Medicare premiums, lots of them have continued working, gone back to work, or are at least considering it. But if you're working while collecting Social Security, you may be subject to the retirement earnings test, which can have a major effect on your monthly payment.

The retirement earnings test applies to anyone collecting benefits while working before reaching full retirement age. That's age 67 for anyone born in 1960 or later. The government will reduce your annual benefits by $1 for every $2 you earn above a certain threshold each year. For 2025, the threshold was $23,400, but it increased to $24,480 in 2026.

If you're still working or went back to work, the SSA will adjust your benefit in January based on your projected income for the year. If that figure went up or down, that will have a noticeable impact on your benefit. But if your income is set to stay the same, you'll still be able to keep about $45 more per month due to the increase in the earnings test threshold.

If you were born in 1959 and reach full retirement age this year, you could see a huge increase in your benefit this month. That's because the earnings test has a higher threshold for the year in which you reach full retirement age. That figure is $65,160 this year. Moreover, you'll only see a reduction of $1 in total annual benefits for every $3 you earn above that amount.

Once you reach full retirement age, the earnings test no longer applies. The government will adjust your monthly benefit to account for the amount it withheld due to the earnings test, and you'll receive the full amount regardless of how much you earn from working.

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