The Social Security Administration (SSA) announced a 3.6% cost-of-living adjustment (COLA) for 2027, affecting about 76 million Americans receiving Social Security or Supplemental Security Income (SSI). Average retirement benefits will increase by roughly $75 per month before deductions. 1,2How much that changes your retirement budget depends on your benefit amount, Medicare premiums, taxes and household expenses in the coming year.
What changes in 2027
- January 2027: Social Security recipients begin receiving higher payments.
- December 31, 2026: SSI recipients receive their increased payment for January.
- COLA notices: Online notices may be available as early as late November. SSA will mail notices in December to recipients who have not enrolled in paperless delivery. 1
SSA says new users should create a my Social Security account and enroll in paperless notices by November 18, 2026, to view their notice online. 1
How much more you could receive
SSA estimates the average monthly retirement benefit will rise from $2,095 to $2,170. Your dollar increase depends on your existing benefit. 2
For illustration, a $2,500 gross monthly benefit would increase by approximately $90, to about $2,590 before deductions, or roughly $1,080 over 12 monthly payments. Your SSA notice will confirm your actual benefit amount. 1
Start with the amount deposited
For most Medicare beneficiaries, Part B premiums are deducted from Social Security payments. Any elected federal tax withholding also reduces your deposit. 3,4
If your Medicare premium rises, it may absorb some of the increase. Review your new benefit and deductions, then use the expected net deposit in your spending plan.
Compare the COLA with your own costs
The COLA is designed to help benefits keep pace with inflation, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The 2027 adjustment reflects price changes between the third quarters of 2025 and 2026. 5
Your own costs may change differently. Compare your expected housing, insurance, groceries and healthcare expenses with this year’s spending before treating the full increase as extra spending money.
Review the tax impact
Depending on your income and filing status, up to 85% of your Social Security benefits may be included in federal taxable income. The 85% figure describes the share of benefits included in income; your tax rate is determined separately. 6
A larger benefit can change the taxable amount. Review the adjustment alongside pensions, taxable investment income and retirement account withdrawals with your advisor and tax professional. Your final tax bill depends on your full return, including deductions. 6
Revisit your retirement income plan
Update your household cash flow once you know your new benefit and deductions. Consider whether the increase will cover higher bills, support cash reserves or change what you need to withdraw from savings.
If your spouse also receives Social Security, review both notices together to understand how your combined income and planned withdrawals will cover expenses.
At Concord Wealth Partners, we help clients review how their retirement income fits into their broader financial plan. If you would like to discuss what the 2027 change means for your household, please reach out.
Social Security Announces 3.6 Percent Benefit Increase for 2027. October 14, 2026.
Social Security Administration. 2027 Cost-of-Living Adjustment Fact Sheet.
Medicare.gov. How to Pay Part A and Part B Premiums.
Social Security Administration. Request to Withhold Taxes.
Social Security Administration. Latest Cost-of-Living Adjustment.
Internal Revenue Service. Publication 915 Social Security and Equivalent Railroad Retirement Benefits.