Your 2027 Social Security Raise Is Coming. Here’s How Much You’ll Actually Keep.

Every October, the Social Security Administration announces the cost of living adjustment (COLA) for the coming year. This year, early estimates point to one of the larger increases in recent memory. Based on inflation data through August, forecasters expect the 2027 adjustment to land somewhere around 3.5% to 3.6%, compared with 2.8% in 2026.

That’s good news. But the number in the headline isn’t the number that lands in your bank account. Before you build next year’s budget around it, here’s what to watch.

First, What a COLA Actually Is

A COLA isn’t a raise the way a bump in your paycheck is. It’s designed to help your benefit keep up with rising prices.

The adjustment is based on the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September, compared with the same three months a year earlier. In other words, if you’re getting a bigger COLA, it’s because the things you buy already cost more. The increase is catching you up, not getting you ahead.

The final inflation report the calculation depends on is scheduled for release on October 14, with the official 2027 COLA expected shortly after. Until then, every percentage you see is an estimate.

The Medicare Math

For most retirees, Medicare Part B premiums come directly out of their Social Security checks. So when Part B goes up, part of your COLA is spoken for before you ever see it.

The Medicare Trustees currently project the standard Part B premium at $209.50 per month in 2027, an increase of $6.60 over 2026. The official figure is typically announced in the fall.

Here’s a simple hypothetical. A married couple receives a combined $4,000 per month from Social Security. A 3.5% COLA would add about $140 per month. If both spouses pay the standard Part B premium, the projected increase takes back about $13.20. That leaves roughly $127 per month, before taxes and before any changes to prescription drug coverage.

Still a raise. Just a smaller one than the headline suggests.

Three Things That Can Shrink It Further

1. IRMAA surcharges. Retirees with higher incomes pay more for Part B and Part D through what’s called the Income Related Monthly Adjustment Amount, or IRMAA. It’s based on your tax return from two years earlier, which means your 2025 income sets your 2027 premiums, and the income you report this year will affect what you pay in 2028. At the top tier, the total Part B premium can be more than three times the standard amount.

A large Roth conversion, a home sale, or a big capital gain can push you over a threshold, and you won’t feel it until two years later.

2. Part D changes. A federal program that had been holding down premiums on standalone Part D drug plans ends after 2026, and some enrollees could see their premiums rise by $11 to $20 per month. If you have a Part D or Medicare Advantage plan, your Annual Notice of Change should arrive by September 30 and will spell out exactly what’s changing for 2027. Open enrollment runs October 15 through December 7. If you do nothing, your plan simply renews, changes and all.

3. Taxes on your benefit. Depending on your total income, up to 85% of your Social Security benefit can be subject to federal income tax. The income thresholds that determine how much is taxable were set decades ago and have never been adjusted for inflation. As your benefit grows over time, more of it can become taxable, even if your lifestyle hasn’t changed at all.

Why This Is a Planning Question, Not Just a Budget Question

In our Retire Forward Process™, Social Security lives under Income, Medicare lives under Healthcare, and IRMAA and benefit taxation live under Taxes. A single COLA announcement touches three of the five pillars at once. Looking at any one of them in isolation is how money gets left on the table.

A few questions worth answering before the year ends:

• Do you know which IRMAA bracket your income puts you in? Being just over a threshold can cost more than being well over it feels like it should.
• Are you planning a Roth conversion, asset sale, or large withdrawal this year? The timing could affect your Medicare premiums two years from now.
• Is your Part D plan still the right fit for your prescriptions in 2027? A plan that worked this year may look very different next year.
• Does your income plan account for rising healthcare costs, not just a rising benefit? Those two numbers don’t always move together.

The Bottom Line

A larger COLA is welcome. But what matters is the amount that actually reaches your account, and how it fits into the rest of your plan. The retirees who feel most confident heading into a new year aren’t the ones with the biggest raise. They’re the ones who know exactly where their money is going.

If you’d like to see what the 2027 changes mean for your household, let’s walk through it together.

Always Forward.

This article provides general educational information about Social Security and Medicare based on publicly available projections as of September 2026. COLA and premium figures are estimates until officially announced by the Social Security Administration and the Centers for Medicare & Medicaid Services. Examples are hypothetical and for illustration only. This content does not constitute investment, tax, or legal advice. Individual circumstances vary. Consult your Momentum Wealth advisor about your specific situation.