Every January your Social Security check goes up.
That increase is called the COLA. The cost of living adjustment.
It is the one thing most retirees count on without question. Inflation goes up. Your check goes up. That is the deal Congress made with you decades ago when you were paying into the system every single paycheck.
A powerful bipartisan group just proposed changing that deal.
And if you have been a high earner your entire working life, you need to read every word of this.
Here is what is happening.
The Committee for a Responsible Federal Budget just published a white paper proposing to cap Social Security COLAs for the highest income retirees.
Before you throw this email across the room, here is what you need to know.
This is not a law. Not a bill. Not even a proposal sitting in front of Congress right now.
It is a policy paper from a bipartisan nonprofit. The kind of organization Washington listens to when it needs intellectual cover to make hard decisions. The kind of proposal that starts as a think tank idea in October and becomes a Senate hearing by March.
That is why it matters now. Not because it passed. Because it is the direction the wind is blowing.
Here is exactly what they are proposing.
The Committee for a Responsible Federal Budget says the Social Security trust fund is running out of money. They are right. Without congressional action the fund faces depletion around 2032. Their solution is to limit how much of the annual COLA goes to the highest earners.
Here is the specific breakdown.
If you receive less than $45,000 per year in Social Security benefits, nothing changes. You keep your full COLA every year. No haircut. No cap. No change at all.
If you are in the top 25% of earners your annual raise gets capped at a fixed dollar amount instead of a full percentage increase. In practical terms your check still goes up every year. Just not by as much as it would under current law.
If you are in the top 5% of earners, by 2055 your cumulative benefits would be roughly 7% lower than they would have been without the cap.
The CRFB estimates this saves $115 billion over 10 years.
Sounds significant. Here is the context.
$115 billion closes about one tenth of Social Security's long-term funding gap.
One tenth.
That means even if this proposal passes exactly as written, nine tenths of the problem still needs solving. More proposals are coming. More caps. More adjustments. More means testing. More ways the system gets restructured before 2032.
Which is exactly why the most powerful thing you can do right now is understand the system well enough to position yourself ahead of every change before it hits.
And here is something nobody is telling you about your COLA right now.
It is already being eaten alive. Today. Before any of this passes.
Here is the 2026 math most retirees never see laid out plainly.
Social Security announced a 2.8% COLA for 2026. For the average retiree that means $56 more per month. That is $672 per year. Sounds like a raise.
Now here is what happened at the same time.
Medicare Part B premiums went up $17.90 per month in 2026. From $185 to $202.90.
That single premium increase consumed 32% of the average retiree's entire annual raise before they spent a dollar on groceries. Before they paid a utility bill. Before inflation touched a single thing in their life.
The raise was $56. The premium increase was $17.90. The real raise was $38.10.
Not 2.8%. More like 1.9%.
And that is for the average retiree paying the standard Medicare premium.
For retirees paying IRMAA surcharges on top of the standard premium, the math gets significantly worse.
A large IRA withdrawal in 2024. A Roth conversion. A home sale. Any one of those income spikes from two years ago can push a married couple into the first IRMAA bracket and add $1,948 per year in Medicare surcharges on top of the standard premium.
At that level the 2026 COLA does not just get reduced. It gets wiped out entirely. And then some.
That is not a proposal.
That is happening right now to millions of American retirees who have no idea why their check did not go up as much as they expected in January.
So here is the complete picture.
Washington is debating whether to cap your future raises while the current system is already quietly eroding the raises you are getting today.
Both deserve your attention. But only one of them requires action right now.
Here is what empowered retirees do with this information.
One. Know your real number.
Log into ssa.gov/myaccount right now. Pull up your 2026 benefit amount. Subtract your Medicare Part B premium. If you are in an IRMAA bracket subtract that surcharge too. The number you are left with is your actual monthly take-home Social Security income. Compare it to what you received in January 2025. The difference is your real cost of living adjustment. Not the headline number. The real one.
Two. Protect your COLA from IRMAA before 2028.
Here is the empowering part. You have more control over this than you think.
IRMAA is based on your income from two years ago. Which means decisions you make today determine your Medicare premium in 2028. If you are planning a Roth conversion this year, a large IRA withdrawal, or selling an investment with a significant gain, you have the opportunity right now to structure that decision in a way that keeps you under the IRMAA threshold.
One conversation with your accountant this summer. Before December 31st. That is all it takes. The window is open. Use it.
Three. Stop letting the system make decisions for you.
The CRFB proposal is a future threat. The IRMAA surcharge is a present reality. The Medicare premium erosion of your COLA is happening right now. None of these things are inevitable outcomes for a retiree who understands the rules.
The retirees who get hurt are the ones who find out after the fact.
The retirees who come out ahead are the ones reading this email right now.
That is not an accident. That is preparation.
Here is one more thing worth knowing before you close this email.
The CRFB proposal specifically protects the lowest income retirees. The people who need Social Security the most keep their full COLA no matter what. The adjustment falls on people who have done well. People with higher lifetime earnings. People who built something.
If that describes you, this proposal is not a punishment. It is a signal.
A signal that the rules are changing and the people who understand those changes will navigate them. The people who do not will get surprised by a January check that does not go as far as they planned.
You just got the signal.
Now you know what to do with it.
Stay sharp.
— US Retirement Report
This newsletter is for informational and educational purposes only and does not constitute financial, tax, or investment advice. Please consult a qualified financial advisor before making any decisions.
Move this email to your Primary inbox so you never miss a daily briefing. On mobile: tap the three dots. Move to Primary.