Good news! Social Security benefits are increasing by 3.6% in 2027.

🎉 But your monthly benefit isn’t the only number worth watching. Whether you’re retired, collecting benefits, or still working, here are the important changes to know as you plan for the new year:

✅ IF YOU’RE RETIRED AND COLLECTING SOCIAL SECURITY

Your monthly benefits are going up!

The Social Security Administration (SSA) has announced a 3.6% Cost-of-Living Adjustment (COLA) beginning with benefits payable in January 2027.

💵 What does that mean for your wallet?

If your current monthly Social Security benefit is $3,000, here’s the breakdown:

  • Current monthly benefit: $3,000

  • 3.6% increase: +$108 per month

  • New monthly benefit: $3,108

  • Additional annual benefits: $1,296

That’s an extra $108 per month before any applicable Medicare premium deductions, taxes, or other adjustments. Your actual increase may differ depending on your benefit amount and deductions.

A little extra can make a difference! Be sure to review your personalized COLA notice when it becomes available.

✅ IF YOU’RE STILL WORKING AND COLLECTING SOCIAL SECURITY

You can work and collect Social Security retirement benefits, but if you haven’t reached Full Retirement Age (FRA), your earnings may affect how much you receive.

Here are the 2027 earnings limits:

  • Under Full Retirement Age for all of 2027: You can earn up to $25,560 per year. Social Security generally withholds $1 in benefits for every $2 earned above this limit.

  • Reaching Full Retirement Age during 2027: You can earn up to $67,920 before the month you reach FRA. Social Security generally withholds $1 for every $3 earned above this limit during the applicable period.

  • At Full Retirement Age or older: There is no earnings limit on your work income.

These rules apply to earnings from work, not pensions or investment income. Benefits withheld under the earnings test may be reflected in a later benefit recalculation.

✅ IMPORTANT SOCIAL SECURITY & MEDICARE TAX UPDATE FOR WORKERS

The maximum earnings subject to Social Security payroll tax will increase in 2027.

  • Social Security taxable wage limit: Increases from $184,500 in 2026 to $192,300 in 2027.

  • Medicare payroll tax: There is no maximum wage limit; Medicare tax generally applies to all covered wages. Additional Medicare tax may apply to higher earners.

If you’re self-employed, remember that self-employment tax generally includes both Social Security and Medicare taxes.

What about Medicare premiums? The 2027 Medicare premium and deductible amounts are separate from payroll tax limits. Check the official Medicare website or your personalized Social Security notice for the updated amounts once released.

📌 WHAT SHOULD YOU DO NEXT?

✔ Review your expected 2027 Social Security benefit.

✔ If you’re working while collecting benefits, estimate your annual earnings and check the applicable limit.

✔ If you’re self-employed or still working, review your payroll or estimated tax planning for 2027.

✔ Watch for your personalized COLA notice in your my Social Security account or by mail.

A little planning today can help you make more informed financial decisions tomorrow!

Want the official details? Visit the Social Security Administration’s COLA information page: https://www.ssa.gov/news/en/cola/