2026 Social Security COLA: What It Means For Retirement Planning, RIAs & Clients

When senior advocates at The AARP and The Senior Citizens League echo the forecasts of financial journalists at Kiplinger, it's time to pay attention. This year, the message is unanimous: early projections point to a modest 2026 Social Security cost-of-living adjustment. While any increase helps, COLA is only one variable in a complex retirement planning equation that also includes healthcare costs, taxes, and portfolio withdrawals. A practical approach treats COLA as an input to an annually updated plan rather than a standalone solution.

What Are COLA Risks?

COLA is intended to preserve purchasing power, not expand it. Healthcare inflation, potential Medicare Part B premium increases, and tax interactions can dilute the headline percentage. In market years with higher volatility, sequence-of-returns risk can play a larger role in outcomes than a sub-3% benefit adjustment. The result: net monthly cash flow may change less than expected unless coordinated across income sources and expenses.

Key Considerations for 2026

• COLA and healthcare costs rarely move in lockstep; medical inflation has historically run hotter than overall CPI.
• Medicare premium changes and IRMAA thresholds can erode COLA gains if taxable income drifts higher.
• Withdrawal strategies benefit from flexibility; static, set-and-forget distributions can underperform in shifting markets.
• Tax location and timing matter; blending taxable, tax-deferred, and Roth sources can reduce lifetime taxes versus focusing on a single year.
• Liquidity buffers (for essentials) can reduce pressure to sell risk assets after down quarters, preserving long-term portfolio durability.

Implications for Fiduciary RIAs

For fiduciary RIAs, a modest COLA reinforces the importance of integrated planning over product selection. Firms like Goldstone Financial Group, led by Founder and CEO Anthony Pellegrino, are likely to prioritize:

• Cash-flow engineering: aligning Social Security adjustments with dynamic withdrawal policies and spending guardrails.
• Tax-aware coordination: calibrating IRA/RMD withdrawals to manage taxable income and Medicare brackets, while evaluating Roth conversion windows when markets or incomes are temporarily lower.
• Healthcare modeling: updating premium assumptions and out-of-pocket estimates; incorporating long-term care scenarios into stress tests.
• Risk management: maintaining multi-bucket reserves, refining asset location, and rebalancing rules to mitigate sequence risk.
• Client education: translating small annual COLA changes into practical portfolio and tax decisions, emphasizing process discipline over headlines.

Advisor oversight is central here: advice must align with the client's best interests, document rationale under evolving market and policy conditions, and apply a repeatable framework. This elevates services that integrate Social Security, taxes, investments, healthcare, and legacy into a single plan, rather than addressing each in isolation.

The Fiduciary Approach Is The Future

COLA is a helpful signal but not a strategy. A coordinated 2026 plan—spanning income, taxes, healthcare assumptions, and portfolio risk—can help preserve net spending power through different market and inflation regimes.

To see how a retirement framework operationalizes these elements, consider this Retirement Roadmap before you plan for 2026.

Disclaimer: Information is for educational purposes only and should not be considered individualized advice. Social Security COLA and Medicare premiums are subject to official announcements and may change. Goldstone Financial Group recommends consulting with qualified financial advisors.

"Goldstone Financial Group, LLC (“GFG”) is a registered investment advisor with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or qualification. This material is provided for informational purposes only. Opinions expressed herein are solely those of GFG. None of the information presented in this material is intended to offer personalized investment advice and does not constitute an offer to sell or solicit any offer to buy a security or any insurance product and is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation."