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5d ago

Mid‑3% Social Security COLA Projected for 2027, About $60–$75 a Month

Higher Medicare premiums, IRMAA and greater taxability could wipe out much of the nominal increase.

Social Security benefits and the 2027 COLA increase explained. (Photo by Kayla Bartkowski / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)
A leading House Democrat is asking the Social Security Administration why the agency has not turned over payment information to the Internal Revenue Service that’s needed to send COVID-19 stimulus checks to millions of people who get monthly retirement or disability benefits.
This week, the Internal Revenue Service announced that on Friday millions who receive Social Security benefits will begin to see their stimulus payments posted in their bank accounts. But those who get Veterans Affairs benefits are still waiting for word on their direct payment, and as of Friday, the IRS still doesn’t have a firm date for when their checks will go out.
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Overview

  • Independent forecasters and advocacy groups currently estimate the 2027 cost‑of‑living adjustment will land in the mid‑3% range, roughly 3.1%–3.8%, which converts to about $60–$75 more per month on a typical $2,000 retired‑worker benefit.
  • The Social Security Administration will set the official COLA after the Bureau of Labor Statistics publishes the September CPI‑W, and the announcement is expected on Oct. 14.
  • Because the COLA is based on the average CPI‑W for July through September, a single hotter or cooler CPI‑W print in August or September can change the final percentage by tenths of a point.
  • Administratively set costs that retirees pay—most importantly Medicare Part B premiums and the Income‑Related Monthly Adjustment Amount—plus fixed tax thresholds that make benefits taxable can reduce or eliminate much of the extra monthly cash from the COLA.
  • Longer‑term pressure on the program continues: the Social Security trustees’ report projects a potential trust‑fund shortfall by about the fourth quarter of 2032, and other 2027 parameter changes such as higher earnings‑test limits and adjusted work‑credit amounts are projected but not yet official.