Each year, Social Security benefits get a Cost-of-Living Adjustment (COLA) to help them keep pace with inflation. The 2027 COLA is scheduled to be announced on Wednesday, October 14. The adjustment applies to retirement, disability, and survivor benefits alike. The higher payments will begin arriving in January 2027, though the first payment will go out on December 31, 2026, because New Year's Day is a federal holiday.
How big will the increase be?
The latest forecasts from The Senior Citizens League and the nonpartisan senior advocacy group AARP point to an increase of 3.5% or 3.6%. A 3.6% COLA would add roughly $75 a month to the average check, while 3.5% would add about $68.
Why a bigger COLA could be bad news
Reports suggest a larger COLA can come with higher Medicare costs. In 2026, for example, retirees received a 2.8% benefit increase, but Medicare Part B premiums also jumped to $202.90 a month, with a $283 deductible.
A bigger COLA can also push some retirees into IRMAA (income-related monthly adjustment amounts), a surcharge on Medicare Part B and Part D premiums for higher earners. Medicare sets these surcharges using modified adjusted gross income (MAGI) from two years earlier, so 2026 premiums are based on 2024 income.
Retirees close to an IRMAA threshold ($109,000 for singles, $218,000 for couples) could be tipped into a higher premium bracket by even a modest COLA bump. The result is a frustrating cycle: an increase meant to offset inflation can be partly clawed back through higher Medicare costs later.
Taxes are another factor. Social Security benefits are taxable for some retirees, and a COLA increase could push them over the income threshold at which they start owing tax on their benefits.
The numbers can be stark. In 2026, retirees in the first IRMAA tier paid about $81 more per month in Medicare premiums than standard Part B enrollees. For someone receiving a $56 monthly COLA increase, that surcharge wipes out the gain entirely, and then some.
Those in higher brackets fare worse. In the second tier, surcharges rose to roughly $202 per month above the standard premium, far outweighing the extra money arriving in the Social Security check.
