Every year, I hear the same comment from retirees:
“My Social Security went up… but it doesn’t feel like I have any more money.”
This year is a good example of why.
Social Security benefits increased by 2.8%, following last year’s 2.5% increase. On the surface, that sounds like progress — especially compared to years when COLAs were minimal or nonexistent.
But for many Baby Boomers, that increase isn't making it into their pockets.
Most retirees have their Medicare Part B premiums deducted directly from their Social Security checks. So when Medicare costs rise in the same year as a COLA, the increase can be reduced — or effectively canceled out.
Social Security Was Never Meant to Carry the Whole Load
Social Security is an important foundation of retirement income, but it was never designed to fully fund retirement — or to keep pace with every rising cost retirees face.
Relying on annual COLAs to maintain lifestyle can leave retirees exposed, especially when those increases are offset by Medicare and healthcare expenses.
That’s why retirement planning has to go beyond watching benefit increases and market returns.
How We Address This at Evergreen Wealth Advisors
At Evergreen Wealth Advisors, we take a holistic wealth management approach. That means Social Security, Medicare, taxes, investments, and income planning are all viewed together — not in isolation.
One of the ways we help retirees bring structure and confidence to their income is through our Bucket Plan strategy.
Rather than hoping Social Security increases solve the problem, we organize assets by purpose:
- Short-term bucket: Designed to provide reliable income and cover near-term expenses without market stress
- Mid-term bucket: Supports income needs in the years ahead with a balance of growth and stability
- Long-term bucket: Focused on growth to help combat inflation and support later retirement years
This approach helps retirees avoid pulling income from the wrong place at the wrong time — particularly during years when costs rise faster than expected.
Turning a COLA Into a Bonus — Not a Lifeline
When Medicare increases offset Social Security COLAs, the answer isn’t to chase returns or make emotional decisions. It’s to ensure your income plan is built intentionally to:
- Produce dependable, spendable income
- Anticipate rising healthcare costs
- Reduce unnecessary taxes
- Avoid overreliance on a single income source
When retirement income is planned correctly, a Social Security COLA becomes a nice addition — not something you’re depending on to keep up.
The Bottom Line
Retirement success isn’t about what changes on paper.
It’s about what shows up in your checking account — and how confident you feel about the years ahead.
With the right plan in place, retirees can take back control, even when rising costs try to chip away at progress.