TIAA Survey Finds 77% of Americans Ages 18 to 65 Fear Rising Health Costs Will Derail Retirement. Social Security Checks Reveal Why
Your Social Security statement promises one number, but Medicare quietly collects its share before the deposit ever hits your bank account, and for some retirees that gap grows far wider than they expect.
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Americans are worried about what health care will cost them in retirement, long before the bills arrive. TIAA’s 2026 Retirement in the Age of AI and GLP-1s survey found that 77% of respondents view rising medical expenses as a threat to their retirement plans. The survey included 1,000 U.S. adults ages 18 to 65, including people still decades away from Medicare.
Once you reach Medicare age, that concern becomes a monthly expense. Picture Carol, newly retired and collecting Social Security. Her benefit statement shows $2,100 a month, but her first bank deposit is smaller. Medicare has already collected its premium before the money reaches her account.
And that’s only the beginning. Depending on income and coverage choices, Medicare can take considerably more than the standard monthly premium. Other health care bills may arrive separately.
Medicare Gets Its Share Before You Get Yours
Medicare Part B covers doctor visits, outpatient care and medical equipment. The standard premium in 2026 is $202.90 a month, or $2,434.80 annually. If you’re already collecting Social Security, that premium generally comes straight out of your monthly benefit.
That leaves Carol with $1,897.10 before any tax withholding, a $202.90 difference every month. The amount she sees on her benefit statement isn’t necessarily what she has available to spend.
The squeeze is real. Medicare’s standard Part B premium climbed $17.90 from 2025, while Social Security benefits received a 2.8% cost-of-living adjustment for 2026. For retirees, a higher premium can absorb part of that raise before it ever reaches their bank accounts.
Surcharges, Drug Plans and Bills That Come Separately
For higher earners, Medicare takes a bigger bite. In 2026, a single filer with income above $109,000, or $218,000 for married couples filing jointly, enters the first income-related surcharge bracket. That raises the monthly Part B premium to $284.10. At the highest income level, the premium reaches $689.90.
Medicare generally uses income from two tax years earlier to calculate these surcharges. That means earnings from before retirement could still determine what you pay today. If leaving work substantially reduced your income, you can ask Social Security to lower the surcharge using Form SSA-44.
Not every Medicare expense appears as a deduction from Social Security. Here’s how the costs are typically handled:
- Deducted from Social Security: The monthly Part B premium, including any income-related surcharge. Higher-income beneficiaries also pay a Part D surcharge ranging from $14.50 to $91 monthly, generally deducted from Social Security or billed by Medicare.
- Paid to the drug plan: Part D premiums vary by plan. You can generally pay the insurer directly or arrange to have the premium withheld from Social Security.
- Paid separately: Medigap premiums, which cover certain out-of-pocket costs under Original Medicare.
- Paid when you receive care: Original Medicare has a $283 annual Part B deductible and a $1,736 Part A inpatient hospital deductible per benefit period. Additional coinsurance and copayments may apply.
Retirees with limited income and savings may qualify for help with these expenses. State-administered Medicare Savings Programs can cover the Part B premium, while the Qualified Medicare Beneficiary program also helps with deductibles, coinsurance and copayments.
Some states have more generous eligibility rules than the federal minimums. If you qualify for premium assistance, that monthly charge may no longer come out of your Social Security check, leaving more money in your account.
A Big IRA Withdrawal Can Show Up in Your Check Two Years Later
Medicare’s income calculation includes taxable withdrawals from traditional IRAs and 401(k)s, taxable Roth conversions and realized capital gains.
Suppose a single retiree took a large IRA withdrawal in 2024 to replace her roof, pushing her modified adjusted gross income above $109,000. That could trigger a higher Medicare premium in 2026, even if her income has since returned to normal.
Spreading discretionary withdrawals across tax years may help avoid crossing a surcharge threshold, but the timing matters. An unusually large withdrawal isn’t itself grounds for an income-related premium reduction. A qualifying life change, such as retirement or reduced work, may provide a separate route to relief.
Plan Around the Deposit You Actually Get
Your Social Security benefit may look generous on paper, but the amount reaching your bank account tells a different story. Review your benefit notice for Medicare deductions and use that net payment to build your retirement budget.
Then account for the expenses that won’t come out automatically. Prescription drug coverage, supplemental insurance and out-of-pocket medical bills can put additional pressure on a fixed income.
The concerns captured in TIAA’s survey don’t disappear once retirement begins. But knowing what Medicare will collect, what you’ll owe separately and whether you qualify for assistance can help you stay ahead of those expenses. Review the numbers each fall when Medicare announces its updated premiums.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
