Social Security's 3.6% raise for 2027: what reaches your budget after Medicare

The Social Security Administration announced on October 14, 2026 that benefits will rise 3.6% in 2027, the largest increase in four years, according to the SSA's 2027 COLA fact sheet. The cost-of-living adjustment applies to about 76 million people receiving Social Security or Supplemental Security Income (SSI). For the average retired worker, SSA estimates the monthly benefit rises from about $2,095 to $2,170.

That $75 is not quite what lands in the bank. For most people on Medicare, the Part B premium comes out of the Social Security payment before it is deposited, and that premium is also rising. This guide shows how to work out the raise you will actually see, when it arrives, and how to update your budget for it. Benefit examples are illustrations, not anyone's actual payment.

When does the 2027 COLA reach your bank account?

The 3.6% increase applies to benefits for December 2026, which Social Security pays in January 2027. So the first larger Social Security payment arrives on your usual January payment date. SSI works differently: the higher SSI amount starts with the payment dated December 31, 2026, according to SSA.

SSA usually sends a notice with your new benefit amount in December and posts it in your online my Social Security account. That notice is the number to use in your budget, because it shows the new benefit, any Medicare premium deducted, and the net payment.

How much of the raise is left after Medicare Part B?

Most of it. The 2026 Medicare Trustees Report projects the standard Part B premium at $209.50 a month in 2027, up $6.60 from $202.90 in 2026, as reported by AARP. That is a projection. The Centers for Medicare & Medicaid Services usually publishes the official premium in November.

Here is what that means at three benefit levels, assuming the standard Part B premium is deducted from the payment and nothing else changes:

SSA rounds benefits down to the whole dollar, and the Part B figure is the projected standard premium, so your own numbers may differ slightly. People with higher incomes pay an extra amount for Part B, known as IRMAA, and their deduction will be larger. If you have federal tax withheld from your benefit, the withholding can change too.

Does a 3.6% raise keep up with your costs?

It depends on what you spend money on. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), comparing the third quarter of 2026 with the third quarter of 2025. That index tracks the spending of working households, not retirees.

Retirees often spend a larger share on housing, health care, and utilities, which can rise faster than the overall index. If your rent, insurance, or energy bills went up more than 3.6% this year, the raise covers less than it seems. Why your budget rises faster than inflation shows how to work out your own rate from your spending, and Is your raise keeping up with inflation? shows how to compare it with an increase in income.

A quick check: take your three biggest monthly bills and compare this year's amounts with last year's. If together they rose by more than your net raise, plan for a tighter 2027, not a looser one.

How should you update your budget for 2027?

1. Wait for the notice, then change the income line. Use the net deposit from SSA's December notice, not 3.6% of your old benefit.
2. Check the Medicare costs that change in January. Medicare open enrollment runs from October 15 to December 7. Your plan's annual notice of change lists new Part D or Medicare Advantage premiums and copays, which can rise more than Part B. If a spouse under 65 buys their own coverage, 2027 ACA marketplace premiums change in January too.
3. Give the extra money a job before it arrives. If the raise is $68 a month, decide now where it goes: a bill that rose, an emergency fund, or a category that is always over.
4. Leave room for November. When CMS publishes the official Part B premium, update the deduction if it differs from $209.50.

A budget in Nethaven keeps planned income and spending side by side, so when the new deposit arrives you can see at once whether it covers the bills that went up. The budget calculator is a quick way to rerun the numbers without an account.

What else changes in Social Security for 2027?

For people still working, two limits rise, according to the SSA fact sheet:

• Earnings test: if you are under full retirement age for all of 2027, SSA withholds $1 for every $2 you earn above $25,560. In the year you reach full retirement age, it withholds $1 for every $3 above $67,920, counting only earnings before the month you reach it.
• Taxable maximum: the most earnings subject to Social Security tax rises from $184,500 to $192,300.

If you are still deciding when to claim, these limits matter more than the COLA. Benefits withheld under the earnings test are not lost for good: SSA recalculates your benefit at full retirement age to credit them.

SSA figures from the 2027 COLA fact sheet and announcement of October 14, 2026. Part B premium projection from the 2026 Medicare Trustees Report as reported by AARP. All checked October 23, 2026. Benefit amounts in the table are examples.