3 Expert Money Takeaways From the New 2027 Social Security Rate Hike

The U.S. Social Security Administration released its new 2027 cost-of-living adjustment, and at 3.6 percent, it ranks relatively high in the historical COLA range.

According to the SSA, beneficiaries can expect an average increase of $75 per month, depending on their Social Security status and retirement age. About 72 million Social Security beneficiaries are expected to benefit from the COLA hike.

“The average retired worker’s check goes from $2,095 to about $2,170 a month—roughly $75 more,” Mohsin Writer, an analyst at the personal financial advisory platform, Luxiro, told NTD News. “A retired couple where both get benefits gains about $117 a month.”

But the COLA story is more than a 3.6 percent raise for Social Security recipients, and beneficiaries should pay close attention, especially to these new COLA Hike factors.

Expect your COLA notice by early November, with a caveat

The SSA states that program beneficiaries who’ve set up a digital account on MySocialSecurity.com can view their 2027 COLA status online. That’s approximately three weeks earlier than for program participants who haven’t established an online account on the SSA site.

The notice will include a one-page summary of the new CILA rules and how they affect each account, including specific dates, dollar amounts, and any potential deductions, the SSA noted.

Don’t necessarily look at the COLA hike as a bonus

The COLA rate hike is set by law based on government inflation figures, comparing the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September with the same months a year earlier.

“Basically, the percentage increase becomes the next year’s raise,” Aaron Hansome, licensed health insurance agent and founder of Hansome Helping Hands, a Medicare and caregiving checklist services company for families, told NTD News. “So, a 3.6 percent COLA is not a bonus. It is meant to keep up with prices that already went up.”

Take Medicare price hikes into account with the COLA boost

In the same vein, the biggest thing retirees might miss with the COLA hike is that the raise on paper is not the raise in the bank. “Most people on Medicare have their Part B premium taken straight out of their Social Security check, and the new Part B premium starts in January at the same time as the COLA,” Hansome noted. “Your real increase is the COLA minus any jump in Part B. Medicare costs.

Higher-income retirees should also know that Medicare’s income-related surcharges are based on tax returns from two years earlier, not the COLA itself. “One practical tip is to know that Medicare Open Enrollment runs through December 7, 2026,” Hansome said. “If your plan’s premium or drug costs are going up in 2027, that can wipe out part of the COLA, so it is worth comparing plans now.”

Hansome added that each state’s SHIP counseling program offers free, unbiased help at shiphelp.org.

Incorporate The New COLA Number Into Your 2027 Household Budget Plan

Professional money managers say Social Security recipients should take the COLA hike into account with their monthly budgets, even for $75.

“One important point is that a benefit increase doesn’t necessarily translate into the same increase in purchasing power,” Blaire Solace, spokesperson at Asset Protection LLC, told NTD.  “Housing, healthcare, insurance, and everyday expenses can put pressure on a retirement budget even when monthly benefits rise.”

For retirees, Solace emphasizes reviewing the adjustment alongside actual expenses, checking retirement income sources, and ensuring broader financial plans account for rising costs. “The goal is to understand how the increase fits into the household’s overall financial picture rather than treating the headline percentage as the whole story,” she noted.

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.