Social Security Is Rising 3.6% in 2027. Here's What It Means for Your Retirement Plan.

By Christian Campbell, Business Development Manager | October 15, 2026

On October 14, the Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for 2027. It's the largest COLA since 2023, up from 2.8% in 2026. The new amount shows up in the payment you receive in January 2027.

A raise is good news. But the number on the letter isn't the whole story. Medicare premiums, taxes and your own spending all affect how much of that increase you actually keep.

How much will your check go up?

The average retired worker's benefit rises about $75 a month, from roughly $2,095 to $2,170. To estimate your own increase, multiply your current monthly benefit by 3.6%. A $3,000 benefit, for example, grows by about $108 a month. Individual increases vary, and Medicare premiums and tax withholding can affect how much of the raise you actually take home.

If you have a my Social Security account, your COLA notice will appear online in late November. Set up an account by November 18 to view it there. Paper notices go out in December.

Three things that can shrink the raise

Medicare Part B premiums. Part B is usually deducted straight from your Social Security check. The 2026 Medicare Trustees Report projects a 2027 standard premium of $209.50 a month, up $6.60 from $202.90 in 2026. This is a projection, not the final figure; Medicare typically announces official premiums in the fall. Higher earners also pay a surcharge (IRMAA), which is based on your income from two years earlier.

Taxes on your benefits. Up to 85% of your Social Security can be taxable. The income thresholds that trigger this tax ($25,000 for single filers and $32,000 for married couples) have never been adjusted for inflation. So each COLA can pull more retirees' benefits into taxable territory.

Your real cost of living. The COLA is based on a national inflation index. Your own costs, such as homeowner's insurance, health care and property taxes around Lake Norman, may be rising faster or slower than that.

Four moves to make before year-end

Recheck your withholding. If your benefits are taxable, a bigger check may mean you need more withheld. Form W-4V lets you have federal tax taken directly from your Social Security.

Use the new senior deduction. For tax years 2025 through 2028, there's an additional deduction of up to $6,000 per eligible person age 65 or older. It gradually phases out above $75,000 of modified adjusted gross income ($150,000 for joint filers). It can lower your taxable income, but it does not eliminate taxes on Social Security benefits. Managing the timing of IRA withdrawals or Roth conversions may help you keep more of the deduction.

Watch this year's income for future Medicare costs. Because IRMAA looks back two years, a large Roth conversion or asset sale this year can raise your Medicare premiums in 2028. Plan the size and timing together.

Update your income plan. A higher Social Security check may mean you can take less from your portfolio next year. That can stretch your savings and lower your taxes.

Still working? This affects you too

The maximum earnings subject to Social Security tax rises from $184,500 to $192,300 in 2027. Business owners and high earners will see slightly more payroll tax. It's also a good moment to revisit when to claim, since each year you delay past full retirement age (up to age 70) permanently increases your benefit.

The bottom line

A 3.6% raise helps, but its real value depends on how it fits with your taxes, Medicare costs and withdrawal strategy. Our team helps Lake Norman retirees and pre-retirees coordinate Social Security with the rest of their plan, in a way that reflects their values. Start the conversation to see how the 2027 changes affect your plan.

Sources: Social Security Administration, "Social Security Announces 3.6 Percent Benefit Increase for 2027," October 14, 2026; AARP, "Social Security COLA Increase Will Boost 2027 Benefits"; 2026 Annual Report of the Medicare Boards of Trustees.

This article provides general educational information and is not individualized investment, tax, or legal advice. Social Security benefits, Medicare premiums, and tax treatment depend on individual circumstances. Information is current as of October 15, 2026, and is subject to change. Consult your financial and tax professionals regarding your situation.