Social Security’s 2027 raise is out, and it is the biggest one in three years. Before you spend it, look at what Medicare takes back and what 3.6 percent really buys. Here is how I think about it, in plain terms.

The 2027 Social Security COLA is 3.6 percent, starting with January 2027 payments, SSA announced on October 14, 2026. It reaches nearly 72 million beneficiaries. It is the biggest raise since the 8.7 percent COLA paid in 2023.

What is the 2027 Social Security COLA?

A cost-of-living adjustment (COLA) is the yearly raise that keeps Social Security benefits in step with inflation. Federal law has provided for COLAs since legislation enacted in 1973.

The 2027 COLA applies to benefits for December 2026, which are paid in January 2027. Supplemental Security Income (SSI) payments rise by the same percentage.

How is the Social Security COLA calculated?

The formula is written into the Social Security Act. SSA compares the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August and September with the prior year’s average.

The Bureau of Labor Statistics publishes the CPI-W monthly. The increase is rounded to the nearest tenth of a percent. If prices did not rise, there is no COLA.

Here is how the math worked for the 2026 COLA:

  • Third quarter 2024 average CPI-W: 308.729
  • Third quarter 2025 average CPI-W: 317.265
  • Increase: 2.8 percent, paid starting January 2026

The 2027 COLA used the same steps with 2025 and 2026 data. September’s CPI-W, released October 14, completed the math at 3.6 percent.

How does the 2027 COLA compare with recent years?

SSA’s COLA history shows how much the raise moves with inflation:

Year paid COLA
2022 5.9%
2023 8.7%
2024 3.2%
2025 2.5%
2026 2.8%
2027 3.6%

The 2022 and 2023 raises reflected the high inflation of 2021 and 2022. Since then, COLAs have stayed between 2.5 and 3.2 percent.

Before 2022, the last COLA above 5 percent was 5.8 percent, paid in 2009. Elevated inflation is also why the Fed raised rates in September, which I cover in whether annuity rates are going down.

How much will a typical Social Security check go up?

The average retired worker’s benefit rises about $75 a month, from about $2,095 to about $2,170, per SSA’s 2027 figures. AARP had estimated the same $75 raise before the announcement.

Your raise is your current benefit times the COLA. A $2,000 monthly benefit with a 3.6 percent COLA rises by $72 a month.

Social Security is the only inflation-adjusted lifetime income most retirees have. I explore that gap in my white paper on lifetime income and the architecture of a good retirement.

Will Medicare Part B take part of the 2027 COLA?

It can. The standard Medicare Part B premium is $202.90 a month in 2026, up $17.90 from $185.00 in 2025.

The Part B deductible rose to $283 in 2026, up $26 from 2025. If your premium comes out of your Social Security payment, a higher premium shrinks your net raise.

CMS released the 2026 figures on November 14, 2025, and has not yet announced 2027. The 2026 Medicare Trustees Report projects a 2027 standard premium of about $209.50 a month, up $6.60. That would absorb about $6.60 of the average $75 raise.

What else changes when the COLA is announced?

SSA updated several wage-based limits on the same day. These are the 2027 figures:

  • Maximum earnings subject to Social Security tax: $192,300, up from $184,500
  • Earnings limit if you claim before full retirement age: $25,560 a year, up from $24,480, with $1 withheld for every $2 above it
  • Earnings limit in the year you reach full retirement age: $67,920, up from $65,160, with $1 withheld for every $3 above it
  • Maximum Social Security tax for an employee: $11,922.60, up from $11,439

The earnings limits stop applying the month you reach full retirement age.

Here is what I would tell a friend: enjoy the raise, but don’t expect it to cover every rising cost. Social Security is the floor of your retirement income, not the whole plan. If the rest of your income is fixed, this is a good year to add up how much of your monthly budget is truly guaranteed.

Frequently Asked Questions

When will I see the 2027 COLA in my check?

Social Security beneficiaries see it in the January 2027 payment, which covers December 2026. SSI recipients get it with payments for January 2027.

Can the Social Security COLA ever be zero?

Yes. If the CPI-W does not rise, there is no COLA, which happened for benefits paid in 2010, 2011 and 2016.

Why does my net check rise less than the COLA?

A higher Medicare Part B premium can absorb part of the raise when it is withheld from your benefit.

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