The Social Security Administration announced on October 14 that benefits will rise 3.6% in 2027. The increase is based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2025 to the third quarter of 2026, according to SSA's fact sheet. It lands exactly where AARP's September estimate did.

SSA says the adjustment reaches nearly 72 million Social Security beneficiaries beginning in January 2027, and about 7.3 million Supplemental Security Income (SSI) recipients, whose higher payments begin December 31, 2026. For the average retired worker, SSA puts the increase at about $75 a month.

The numbers that change

2027 benefit amounts, per SSA
BeneficiaryAverage before COLAAverage after COLA
Retired worker$2,095$2,170
Aged couple, both receiving benefits$3,238$3,355
Disabled worker$1,642$1,701
Disabled worker, spouse and one or more children$2,970$3,077
SSI, individual (federal standard)$994$1,029
SSI, couple (federal standard)$1,491$1,544

The first four rows are averages, so your own check will differ. The SSI rows are the federal payment standards, not averages. One figure in SSA's table moves by less than the COLA: the maximum benefit for a worker retiring at full retirement age rises from $4,152 to $4,188 a month, about 0.9%, because it is set by a separate wage-indexed formula rather than by the COLA.

The work-and-pay side

The COLA is the part everyone notices. SSA's fact sheet also resets the thresholds that matter to people still working or about to claim:

2026 and 2027 thresholds, per SSA
Item20262027
Maximum earnings subject to Social Security tax$184,500$192,300
Earnings needed for one quarter of coverage$1,890$1,970
Earnings test, under full retirement age all year$24,480 a year$25,560 a year
Earnings test, year you reach full retirement age$65,160 a year$67,920 a year
Substantial gainful activity, non-blind disability$1,690 a month$1,770 a month
Substantial gainful activity, blind$2,830 a month$2,950 a month

The tax rates themselves are unchanged: 7.65% for employees and 15.30% for the self-employed. What changes is how much pay they apply to. The wage cap rises $7,800, so someone earning above it pays more Social Security tax next year.

Hypothetical: the extra Social Security tax at the new cap
Increase in the wage cap$192,300 − $184,500 = $7,800
Employee share, 6.2% of the increase$483.60
Employer pays a matching share$483.60
Self-employed, 12.4% of the increase$967.20
The 6.2% Social Security portion is part of the 7.65% employee rate; the remaining 1.45% is Medicare, which has no cap. This applies only to earnings above the 2026 cap, so most workers see no change.

What a 3.6% raise looks like on a real check

Hypothetical: a retiree receiving $2,000 a month
Current monthly benefit$2,000.00
COLA at 3.6%+ $72.00
Benefit after COLA$2,072.00
Extra over twelve months$864.00
Illustration only. It ignores Medicare premiums, income tax, and any other changes to your benefit.
A cost-of-living adjustment is not a raise in purchasing power. It is a catch-up for the price increases that already happened. Whether you come out ahead depends on whether your own costs rose faster or slower than the CPI-W.

Two things the headline leaves out

Medicare Part B. For most beneficiaries the Part B premium comes straight out of the Social Security check, so the deposit grows by less than 3.6%. SSA's announcement doesn't include the 2027 premium. It says people with a my Social Security account can see their 2027 Medicare premium in the Message Center beginning in late November, and everyone else gets a notice by mail in December. Until then, plan on the deposit rising by less than the full amount, and treat the exact figure as unknown.

Taxes on benefits. Whether your benefits are taxable depends on your combined income, which is generally your adjusted gross income plus nontaxable interest plus half of your Social Security. SSA's page on the topic shows the original thresholds from 1983 legislation, up to 50% of benefits taxable above $25,000 for single filers and $32,000 for joint filers, and from 1993 legislation, up to 85% above $34,000 and $44,000. Those are fixed dollar amounts in the law, while a COLA raises the benefit side of your income every year. For retirees near a threshold, a raise in benefits can mean a larger share of them is taxed. The IRS explains the worksheet in Publication 915, and a tax professional can run your numbers.

What to do, and what not to do

The IRS usually publishes next year's retirement account limits in the fall, and we will cover them when they are out. For now, the Social Security picture for 2027 is set.

Common questions

What is the 2027 Social Security COLA?

The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027 on October 14, 2026. It is based on the rise in the CPI-W from the third quarter of 2025 to the third quarter of 2026.

When will the 3.6% increase show up in my payment?

SSA says the Social Security increase begins in January 2027. SSI recipients see higher payments beginning December 31, 2026.

How much more will the average retiree get?

SSA's fact sheet lists the average retired worker benefit rising from $2,095 to $2,170 a month, about $75. Your own amount depends on your earnings history and when you claimed.

Will my Medicare premium go up too?

The 2027 Part B premium hadn't been announced in SSA's release. SSA says my Social Security account holders can see it in the Message Center starting in late November, and others receive it by mail in December.

Does the maximum taxable earnings amount change?

Yes. It rises from $184,500 to $192,300 for 2027, per SSA, so workers earning above the old cap pay Social Security tax on more of their pay.

This article is for informational purposes only and does not constitute financial, tax, or legal advice. Benefit figures are SSA averages; your own benefit, taxes, and Medicare premium will differ. Verify your amount in your my Social Security account or with SSA.
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