How big is the 2027 Social Security COLA?

The Social Security Administration announced a 3.6% cost-of-living adjustment on October 14, 2026. It applies to benefits starting in January 2027. The average retired worker benefit rises from $2,095 to $2,170 a month, about $75. The 2026 adjustment was 2.8%, and the last one above 3.6% was 8.7% in 2023.

How much will Medicare Part B cost in 2027?

The Medicare Trustees project a 2027 standard Part B premium of $209.50 a month, up $6.60 from $202.90 in 2026. CMS confirms the official number in November. Higher earners pay an income-related surcharge on top of the standard premium.

Does a Social Security raise make more of my benefit taxable?

It can. Once your income is past the upper threshold, which is $34,000 for a single filer and $44,000 for a couple, about 42 cents of each extra benefit dollar becomes taxable income. The thresholds have never been indexed to inflation. If your combined income is below the lower threshold, the raise adds no tax.

Does the COLA make my retirement plan better off?

It keeps your benefit level with prices. The COLA tracks the rise in the CPI-W over the year, so it protects buying power and does not add to it. The parts worth checking are the Medicare premium and the tax on the benefit, because those change on their own schedule.

ThunderHarbor

October 26, 2026

How Much of the 2027 Social Security Raise You Keep

The Social Security Administration announced a 3.6% cost-of-living raise on October 14. It starts with the January 2027 benefit. The average retired worker goes from $2,095 to $2,170 a month, about $75 more. It is the biggest raise since the 8.7% of 2023, and it follows a 2.8% raise this year.

Two things take a bite before the money reaches you. The Medicare Trustees project Part B to cost $6.60 more a month. More of your benefit can also become taxable. We ran four households through the engine to see how big each bite is.

The Medicare Bite

The Medicare Trustees project a standard Part B premium of $209.50 for 2027, up from $202.90. That is $6.60 a month, or $79.20 a year, for each person on Medicare. CMS confirms the official figure in November, so treat $209.50 as a projection until then.

Medicare takes the premium straight out of the Social Security check. A person who claimed benefits at 62 and has not reached 65 pays no Part B yet, so this bite starts at 65.

The Tax Bite

The IRS taxes up to 85% of your benefit when your combined income passes certain thresholds. Combined income is your other income plus half your benefit. The upper thresholds are $34,000 for a single filer and $44,000 for a couple. Congress set them in 1983 and 1993 and never indexed them, so every raise pulls more of the benefit toward them.

Once you are past the upper threshold, each extra benefit dollar adds about 42 cents of taxable income. If your combined income sits below the lower threshold, the raise adds nothing. That is why the first household in the table pays no tax on the raise.

The table assumes everyone is on Medicare, lives in a state with no income tax, and files for 2027. Most states do not tax Social Security, so federal tax is the whole tax effect for most readers.

Household	Yearly raise	Extra taxable benefit	Extra federal tax	Part B increase	You keep
Single, average benefit, no other income	$905	$0	$0	$79	about $830
Single, average benefit, $22,000 from an IRA	$905	$385	$38	$79	about $790
Couple, $50,000 of benefits, $30,000 from IRAs	$1,800	$765	$0	$158	about $1,640
Couple, $50,000 of benefits, $60,000 from IRAs	$1,800	$765	$92	$158	about $1,550

For these households the raise mostly survives. They keep between 86% and 91% of it. The tax is small because the extra taxable benefit lands in the 10% and 12% brackets. The Medicare increase is a flat $79 a person.

Where the Raise Costs More

A larger bite comes from a threshold with a cliff behind it, and the raise moves your income toward it. The couple in the table gets $765 more taxable benefit. If they sit near a line, $765 can decide which side of it they land on.

Retirees who bought coverage through the ACA marketplace before 65 have the 400% line. Retirees with large IRA withdrawals have the IRMAA tiers, which use income from two years earlier. The 2027 raise therefore shapes a 2029 Medicare surcharge. We explain the lag in the IRMAA two-year lookback post.

The cost-of-living raise tracks the rise in the CPI-W over the year. It keeps your check level with prices and does not add buying power. The parts that change on their own schedule are the Medicare premium and the tax on the benefit, and those decide how much of the raise reaches your spending. For the full list of lines where a small income change costs real money, see Retirement Income Has Cliffs.

Not financial advice

This article is for informational purposes only. Nothing here is financial, tax or legal advice. The households are illustrations, not real people. The Part B premium is a projection until CMS publishes the official figure. Tax figures use federal brackets and ignore state tax, so your result will differ. Confirm with a tax professional before you act.

See your own benefit, tax and Medicare cost together

ThunderHarbor taxes your Social Security with the real thresholds each year and adds Medicare and IRMAA to your spending, so you see the raise after the bites.

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