Why Retirees Are Getting Less Income — And Spending Less Too
PatriotR Daily News 03/09/26
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US NEWS
Medicare Costs Are Eating Into Social Security Checks
A recent warning from financial expert Suze Orman highlights a growing issue facing retirees: even when Social Security benefits increase, rising healthcare costs can quickly eat away those gains. In 2026, retirees are receiving a modest cost-of-living adjustment (COLA), but Medicare premium increases are offsetting much of that benefit. Because Medicare premiums are automatically deducted from Social Security payments, many retirees may not feel much financial relief despite the annual adjustment.
The 2026 Social Security COLA is approximately 2.8%, designed to help retirees keep up with inflation.
However, Medicare Part B premiums increased to around $202.90 per month, a significant jump from the previous year.
Because premiums are automatically deducted from Social Security checks, the net increase many retirees receive may be minimal.
Some retirees could see more than half of their COLA increase disappear after Medicare deductions.
Healthcare remains one of the largest and fastest-growing expenses in retirement.
What this means for you
Social security increases may not fully keep up with rising healthcare costs.
Retirees relying heavily on Social Security could experience little real growth in their monthly income.
Healthcare inflation could gradually reduce purchasing power in retirement.
Planning for medical costs is becoming an increasingly important part of retirement planning.
Additional sources of retirement income may help offset rising healthcare expenses.
Do you feel confident your Social Security and retirement savings will keep up with rising costs? |
US NEWS
Retirees Are Withdrawing Less From Their 401(k)s
A new study shows that many retirees are withdrawing far less from their retirement savings than traditional financial planning guidelines recommend. While advisors have long suggested withdrawing around 4% annually from retirement accounts, the average retiree is currently withdrawing closer to 2.1%. Experts say this cautious behavior is largely driven by fears of running out of money, concerns about inflation, and uncertainty about future market performance.
The average withdrawal rate from retirement savings is about 2.1% per year, well below the traditional 4% rule.
Financial planners generally recommend withdrawal rates closer to 3.5%–4% for sustainable retirement income.
Many retirees are hesitant to spend their savings because they worry about outliving their money.
Retirees tend to spend a larger percentage of guaranteed income, such as Social Security, than investment savings.
Experts refer to this pattern as the “retirement spending paradox” — having savings but feeling uncomfortable using them.
What this means for you
Many retirees are living more conservatively than they may need to.
Fear of running out of money can cause retirees to under-spend their savings.
Inflation and longer lifespans are increasing concerns about financial security later in retirement.
Developing a clear withdrawal strategy may help retirees balance spending with long-term financial stability.
Proper retirement planning can help ensure savings last while still supporting a comfortable lifestyle.
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