Wealth Management
2027 Social Security Benefit Increase Announced
October 16, 2026
While planning for the year ahead, consider several changes to Social Security benefits and Medicare costs that may affect your retirement income and healthcare expenses in 2027. Understanding these updates can help you make informed decisions and keep your financial plan aligned with your long-term goals. Below is an overview on what’s changing, and what it could mean for you:
Cost of Living Adjustment:
The Social Security Administration (SSA) announced a 3.6% cost-of-living adjustment (COLA), effective January 2027. The adjustment is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). On average, Social Security retirement benefits will increase by approximately $75 per month.
Increased payments to individuals receiving Supplemental Security Income (SSI) will begin on December 31, 2026, while the social security increase will start with the January payment. Some individuals receive both Social Security benefits and SSI. Eligible individuals with personal my Social Security accounts who are enrolled in paperless notices can view their COLA notices online starting in late November. Those not enrolled in paperless notices will receive their notices by mail in December.
Earnings Limit Increases:
Several Social Security earnings thresholds will also increase in 2027:
- Taxable maximum: The maximum amount of earnings subject to Social Security tax will increase to $192,300, up from $184,500 in 2026.
- Workers below full retirement age throughout 2027: The annual earnings limit will increase to $25,560. Social Security will deduct $1 in benefits for every $2 earned above this limit
- Workers reaching full retirement age in 2027: The annual earnings limit will increase to $67,920 for earnings received before the month they reach full retirement age. Social Security will deduct $1 in benefits for every $3 earned above this limit.
There is no earnings limit for individuals who reach full retirement age and are at or beyond that age for the remainder of the year. For more information, visit the Social Security Administration's Full Retirement Age Chart.
Medicare Updates for 2027:
Medicare beneficiaries should also review upcoming changes to prescription drug coverage as they plan for 2027.
- Part D deductible: The standard annual deductible will increase from $615 in 2026 to $700 in 2027.
- Out-of-pocket prescription drug costs: The annual out-of-pocket cap for covered Part D medications will increase from $2,100 to $2,400.
- Open Enrollment: Medicare Open Enrollment runs from October 15 through December 7, 2026. Beneficiaries can compare plans, premiums, prescription drug coverage, and out-of-pocket costs for the coming year.
Because coverage and costs vary by plan, reviewing your options can help you make informed decisions about your healthcare expenses. Visit Medicare.gov to compare 2027 plans.
As these changes take effect in 2027, reviewing your retirement income, healthcare costs, and overall financial plan can help you prepare for the year ahead. Consider speaking with an Oppenheimer Financial Professional to understand how these updates may affect your individual circumstances and long-term goals.
DISCLOSURE
This material is derived from sources believed to be reliable and is subject to IRS changes without notice. Oppenheimer & CO. Inc. does not provide legal or tax advice but will work with your other financial professionals to address your needs. Oppenheimer & Co. Inc. Transacts Business on all Principal US Exchanges and is a Member of SIPC 9185533.1