Key Points
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Social Security benefits will get a 3.6% COLA for 2027.
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While your monthly checks could increase nicely, don’t forget to account for the cost of Medicare.
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When the Social Security Administration announced last year that benefits would increase by 2.8% in 2026, many seniors were disappointed. This year’s COLA (cost-of-living adjustment) announcement was a lot more positive.
The 2027 Social Security COLA is 3.6%, which is a notably larger increase. And it’s a raise more seniors may be happy with.
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If you collect a $2,000 Social Security benefit, a 3.6% COLA should add $72 to your monthly checks. But that doesn’t automatically mean you’ll see the full $72. If you’re on Medicare, you can expect your upcoming COLA to be whittled down.
You can’t calculate your raise without knowing Medicare costs
It’s possible to collect Social Security without Medicare coverage. First of all, Social Security eligibility begins at age 62, whereas Medicare eligibility doesn’t start until 65. So it may be that you collect Social Security but aren’t on Medicare because you aren’t old enough.
Some people also opt to delay Medicare enrollment if they have creditable coverage through a workplace plan. So there are different scenarios where it makes sense to be collecting Social Security without Medicare.
But if you are on Medicare, it’s too soon to calculate how much your 2027 COLA will be worth. That’s because dual enrollees pay for Medicare Part B out of their monthly Social Security checks. If the cost of Medicare Part B rises at all in 2027, that increase will need to be deducted from your COLA to calculate your actual net raise.
In other words, let’s say that based on a 3.6% COLA, your benefits should increase by $72. If the cost of Medicare Part B goes up by $10, it will leave you with an extra $62 per month in Social Security, not $72.
Have realistic expectations about your COLA
You may be eager to see your Social Security checks increase once your 2027 COLA takes effect. Just remember that COLAs are designed to help benefits keep up with inflation, not beat it.
If you’re having a hard time making ends meet today, a 3.6% COLA may not change your financial picture all that much. You may want to take additional steps to improve your finances in 2027, such as returning to work or reducing expenses where possible.
And it’s especially worth taking these steps if you’re about to enroll in Medicare, because having those Part B premiums deducted from your Social Security checks could be a game changer — and not a good one.
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