Social Security’s 3.6% COLA, and the Number Nobody Has Yet

1. What was actually announced

On October 14, 2026, the Social Security Administration announced a cost-of-living adjustment of 3.6 percent for 2027, up from 2.8 percent for 2026. It reaches about 72 million Social Security beneficiaries with the January 2027 payment, and about 7.3 million Supplemental Security Income recipients slightly sooner, on December 31, 2026. On the average retired-worker benefit the adjustment is worth roughly $75 a month, moving that benefit from about $2,095 to about $2,170.²

The same announcement moved a set of numbers that have nothing to do with retirees and everything to do with people still working: the maximum earnings subject to Social Security tax, the two retirement earnings test limits, the SSI federal payment standard and the earnings needed for a quarter of coverage. Those are in section 8. Everything between here and there is about what the 3.6 percent does once Medicare has had its share.¹

2. Where 3.6 percent comes from

The COLA is not a decision anybody makes. It is the output of a formula, and the formula is short enough to check yourself. Social Security takes the average Consumer Price Index for Urban Wage Earners and Clerical Workers — the CPI-W — for July, August and September of this year, compares it with the average for the same three months of the last year in which a COLA was set, and rounds the increase to the nearest tenth of a percent.

The numbers this year, from the Bureau of Labor Statistics series itself: the third-quarter 2025 average was 317.265 and the third-quarter 2026 average was 328.746. That is an increase of 3.618741 percent, which rounds to 3.6. Run the same arithmetic one year further back — 308.729 for the third quarter of 2024 against 317.265 for 2025 — and you get 2.765 percent, which is the 2.8 percent COLA that applied in 2026. The method reproduces a known answer as well as this year’s, and Social Security publishes the same two averages in its own determination, so the figure can be checked from either end.³

It is worth knowing which basket that index measures, because it explains a complaint we hear every January. The CPI-W tracks prices for urban wage earners and clerical workers: households whose spending leans toward transport, apparel and food away from home, and away from medical care and housing. A retired household in Broward County does not spend money in those proportions. The COLA is doing what it was designed to do; it was simply never designed to track what an older household actually buys.

3. What 3.6 percent is worth in dollars

Percentages are easy to quote and hard to picture. Here is 3.6 percent applied to a range of monthly benefits, before anything is deducted. Find the line closest to your own and read across.

Monthly benefit now	Monthly increase	New monthly benefit	Extra over the year
$1,200	$43.20	$1,243.20	$518.40
$1,600	$57.60	$1,657.60	$691.20
$2,095	$75.42	$2,170.42	$905.04
$2,500	$90.00	$2,590.00	$1,080.00
$3,000	$108.00	$3,108.00	$1,296.00

The middle line is the one to anchor on: Social Security puts the average retired-worker benefit at about $2,170 a month for 2027, up from about $2,095, which is the $75.42 row. Hold onto that $905 a year, because the rest of this article is about what happens to it.¹

4. The number nobody has yet

Here is what almost every headline this week has left out. For most people the Medicare Part B premium is not a bill that arrives; it is deducted automatically from the Social Security payment before the money reaches the bank. The COLA is the gross figure. Part B is the first thing taken out of it. Your actual 2027 payment is the one minus the other, and only one of those two numbers currently exists.⁶

The 2027 Part B premium has not been announced. CMS normally publishes the Part A and Part B figures in November; the 2026 numbers came out on November 14, 2025. For 2026 the standard Part B premium is $202.90 a month with a $283 annual deductible, and that premium was a jump of $17.90 from $185.00 — about 9.7 percent in one year. We are not predicting 2027 from that. We are pointing out that a single year recently took more in Part B than this year’s COLA gives back on an average benefit.⁵

One 2027 number already circulating is not the premium, and it is worth saying so plainly. The CY2027 Rate Announcement projects the per-beneficiary Part B cost used in Medicare Advantage bidding rising from $191.17 to $205.54. That is an actuarial figure that plans bid against. It is not what an enrollee pays, and anyone quoting $205.54 as next year’s Part B premium is quoting the wrong line of the wrong document.¹⁰

5. Hold harmless, and who it leaves out

There is a protection against the Part B premium eating the whole COLA, and it is narrower than its reputation. The hold-harmless provision, at 42 U.S.C. 1395r(f), says that the increase in the monthly premium may not reduce the benefit payable for December below the benefit payable for the preceding November, after the premium has been deducted. In plain terms: for the people it covers, the Part B increase in dollars cannot exceed the COLA increase in dollars.⁴

The phrase doing the work there is “the people it covers.” The statute attaches three conditions and all of them have to hold:

• You were entitled to a benefit for both November and December of the preceding year. The text requires entitlement to a Social Security benefit under section 202 or 223, or a Railroad Retirement annuity, for both of those months. If you have only just started claiming, you were not.
• The premium was deducted from that benefit for both December and January. If you pay Medicare directly — a quarterly bill, or Medicare Easy Pay out of your bank account — rather than having the premium withheld from a benefit payment, the condition is not met.
• Your premium is not adjusted for income. The provision excludes anyone whose premium is adjusted under subsection (i), which is the income-related monthly adjustment amount. If you pay IRMAA, hold harmless does not apply to you.

So the people who absorb the full Part B increase, whatever it turns out to be, are: anyone new to Medicare or newly claiming Social Security, anyone billed directly instead of by deduction, and the roughly 8 percent of Part B enrollees who pay an income-related amount. There is a fourth group, and it is the largest of all, but it needs its own section.⁵

6. The deduction with no protection

Hold harmless is a Part B provision. It says nothing whatsoever about Part D, and a great many people have a drug-plan premium deducted from the same Social Security payment. If that premium rises for 2027, the entire increase comes out of the COLA with nothing to cap it. The statutory benchmark gives a sense of the direction: the Part D base beneficiary premium, which is used in premium and penalty calculations rather than charged by any one plan, is $41.33 for 2027 against $38.99 for 2026, a rise of about 6 percent.⁸⁹

There is a second reason to expect movement on this line. For the last few plan years CMS ran a voluntary Premium Stabilization Demonstration that damped premium swings for stand-alone Part D plans while the redesigned benefit bedded in. It ends after CY2026, and stand-alone drug coverage returns to ordinary market rules for 2027. That does not mean every premium rises. It does mean this is the year to read the number rather than assume it held.⁸

And here is the part that separates Part D from Part B: you can do something about it. A drug-plan premium $15 a month higher takes $180 a year out of a COLA worth about $905 on an average benefit. Unlike the Part B premium, which is the same for everyone at a given income level, the Part D premium depends on a plan you chose and can change — until December 7, and then not again for a year.

7. What is rising faster than the COLA

Set the 3.6 percent against the Medicare numbers that are already confirmed for 2027 and the shape of next year becomes clearer. Two of these rise about four times faster than the COLA.¹⁷⁸⁹

	2026	2027	Change
Social Security cost-of-living adjustment	2.8%	3.6%	—
Part D out-of-pocket cap	$2,100	$2,400	+14.3%
Part D maximum deductible	$615	$700	+13.8%
Part D base beneficiary premium	$38.99	$41.33	+6.0%
Social Security taxable maximum	$184,500	$192,300	+4.2%
Part B standard monthly premium	$202.90	Not announced	—
Part A inpatient deductible	$1,736	Not announced	—

The two Part D lines deserve a second look, because they are easy to misread as bad news and they are not simply that. The cap is the ceiling on what you can be made to spend out of pocket on covered drugs in a year, so a higher cap is a worse worst case — but only for people whose drug costs are high enough to reach it. The deductible is what you pay before the plan starts contributing, and that one lands on everybody who fills a prescription. Both rose by roughly four times the COLA.⁹

8. If you are still working

A good number of the people who read this are not retired, and the October 14 announcement moved their numbers too. For 2027:¹

• Maximum earnings subject to Social Security tax: $192,300, up from $184,500. Earnings above the cap are not taxed for Social Security, and they do not count toward your benefit either.
• Earnings test, under full retirement age for all of 2027: $25,560. One dollar in benefits is withheld for every two dollars earned above it.
• Earnings test, reaching full retirement age during 2027: $67,920. One dollar is withheld for every three above it, and only earnings in the months before you reach full retirement age count.
• At full retirement age for the whole year: no limit at all. You can earn whatever you earn.
• SSI federal payment standard: $1,029 a month for an eligible individual and $1,544 for a couple.

The earnings test is the one that catches people here, because claiming at 62 and carrying on with part-time work is common across Broward and Miami-Dade. It is worth saying that the taxable maximum does not move with the COLA — it tracks the national average wage index — which is why it went up 4.2 percent in a 3.6 percent year.

9. Will the COLA cost me Extra Help?

This question comes up every January and the fear behind it is reasonable. Extra Help, the federal subsidy for Part D costs, has income and resource limits: for 2026 they are $23,940 in income and $18,090 in resources for an individual, and $32,460 and $36,100 for a married couple living together. Medicare says plainly that these limits may go up each year, which is the important part — the limits and your benefit tend to move in the same direction rather than in opposite ones. One caveat on those two figures: they are the 2026 limits, which is what Medicare publishes today. The 2027 limits are not out yet, so treat 2026 as a working proxy and check again in the new year rather than ruling yourself out now.¹¹

The second thing worth knowing is how much Extra Help is actually worth, because people talk themselves out of applying over a sum far smaller than what they would be giving up. For somebody who qualifies it means a $0 drug plan premium, a $0 deductible, copays capped at $5.80 for a generic and $14.40 for a brand-name drug in 2027, and no Part D late enrollment penalty for as long as you have it. On top of that, payments made on your behalf through Extra Help count toward your $2,400 out-of-pocket cap, so the subsidy moves you toward the ceiling rather than parking you below it.⁹

The application goes through Social Security, and it is free. If you are anywhere near those limits, apply rather than assume. We will sit down and work out where you fall before you file, at no cost and with nothing to sign.

10. A South Florida lens

A 3.6 percent adjustment is the same percentage in Pompano Beach as it is in Peoria. What it buys is not. There are 380,230 people with Medicare in Broward County, 524,508 in Miami-Dade and 370,365 in Palm Beach, and the composition of those three populations could hardly be more different. Miami-Dade has 234,316 people already receiving Extra Help — nearly 45 percent of its Medicare population. Broward has 92,958. Palm Beach has 54,066, under 15 percent.¹³

That matters for the Part D point above more than it looks. Palm Beach County has 149,600 people in stand-alone Part D drug plans, against 85,738 in Broward and 78,335 in Miami-Dade. The reason is in the enrollment split: Palm Beach has 192,500 people in Original Medicare against 177,865 in Medicare Advantage, the one county of the three where Original still comes out ahead. Broward runs 133,954 to 246,276 the other way, and Miami-Dade 129,837 to 394,671. Those stand-alone enrollees are precisely the enrollees whose premiums the stabilization demonstration was damping, and precisely the ones for whom 2027 is a year to read the renewal notice rather than file it. On the Advantage side there are 44 plans in Broward for 2027, 41 in Miami-Dade and 49 in Palm Beach, down from 50, 46 and 55. You can check the figures for your own county on our Broward, Miami-Dade and Palm Beach pages, or any of Florida’s 67 counties with our plan count tool.¹⁴

All of which lands on the same date. Annual Enrollment is open now and closes on December 7, and for anyone in Original Medicare with a stand-alone drug plan it is the only window of the year. Medicare Advantage members get a second one — Medicare Advantage Open Enrollment, January 1 to March 31 — but it only lets you switch Advantage plans or return to Original Medicare, and it cannot fix a stand-alone Part D choice. Our answer page on changing plans after December 7 sets out what each window allows. Our guide to the 2027 Annual Enrollment Period walks through the comparison itself.¹²

11. What to do before December 7

None of this requires you to understand Medicare financing. It requires a handful of things in roughly this order, and the order matters because the middle of the list has a deadline on it.

1. Put the 3.6 percent figure aside for now. It is real, it is final, and it is not actionable. Nothing you do between now and December changes it.
2. Find the Annual Notice of Change your plan mailed by September 30. That document contains the part of your 2027 cost you can still change: the premium, the deductible, the drug tiers and the out-of-pocket maximum. If you cannot find it, call the plan and ask them to resend it rather than guessing.
3. Price your real drug list, not the premium. Write down every medication with its dose and quantity and compare estimated annual totals across the plans available in your county. A low premium with the wrong formulary will cost you more than the COLA is worth.
4. Check the Part B announcement in November. Then, and only then, redo your household budget with both numbers in hand.
5. Decide before December 7, not on it. Enrollment has to be received, not just sent, and the last week of the window is the worst week to be on hold with a carrier.
6. If you are near the Extra Help limits, apply through Social Security. It costs nothing to be told no, and the subsidy is worth several times a 3.6 percent adjustment to anyone who qualifies.

12. Frequently asked questions

13. Sources

1. Social Security Administration. 2027 Cost-of-Living Adjustment (COLA) Fact Sheet — the 3.6 percent adjustment, the $192,300 taxable maximum, the retirement earnings test limits and the SSI federal payment standard for 2027. ssa.gov — 2027 COLA fact sheet
2. Social Security Administration. Social Security Announces 3.6 Percent Benefit Increase for 2027, October 14, 2026 — increased payments to about 72 million beneficiaries from January 2027 and to about 7.3 million SSI recipients from December 31, 2026. ssa.gov — 2027 benefit increase announcement
3. U.S. Bureau of Labor Statistics. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), U.S. city average, all items, not seasonally adjusted — series CWUR0000SA0. The July, August and September index values for 2024, 2025 and 2026 used in the calculation in section 2. bls.gov — CPI-W all items series file
4. United States Code. 42 U.S.C. 1395r(f), Limitation on increase in monthly premium — the hold-harmless provision and the three conditions it attaches. govinfo.gov — 42 U.S.C. 1395r
5. Centers for Medicare & Medicaid Services. 2026 Medicare Parts A & B Premiums and Deductibles, November 14, 2025 — the $202.90 standard Part B premium and $283 deductible for 2026, up from $185.00 and $257, and the share of enrollees paying an income-related amount. cms.gov — 2026 Parts A & B premiums and deductibles
6. Medicare.gov. Pay Medicare premiums — the Part B premium is deducted automatically from the Social Security benefit payment for most people, and billed directly to those who do not receive one. medicare.gov — pay premiums
7. Medicare.gov. Medicare costs — the 2026 Part B premium and deductible and the Part A inpatient hospital deductible of $1,736. medicare.gov — Medicare costs
8. Centers for Medicare & Medicaid Services. July 28, 2026 Parts C & D Announcement — the 2027 Part D base beneficiary premium of $41.33 and the conclusion of the Part D Premium Stabilization Demonstration after CY2026. cms.gov — July 28, 2026 Parts C & D announcement
9. Medicare.gov. Medicare drug coverage costs — the base beneficiary premium of $38.99 for 2026, the out-of-pocket cap and maximum deductible for both plan years, and what counts toward the cap, including payments made on your behalf through Extra Help. medicare.gov — Part D costs
10. Centers for Medicare & Medicaid Services. Announcement of Calendar Year 2027 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies — the projected per-beneficiary Part B cost of $205.54 used in plan bidding, which is not a premium. cms.gov — CY2027 rate announcement
11. Medicare.gov. Help with drug costs — the 2026 Extra Help income and resource limits, the 2027 copayment amounts of $5.80 and $14.40, and that the limits may go up each year. medicare.gov — help with drug costs
12. Medicare.gov. Joining a plan — the Annual Enrollment Period of October 15 to December 7 and the Annual Notice of Change your plan sends by September 30. medicare.gov — joining a plan
13. Centers for Medicare & Medicaid Services. Medicare Monthly Enrollment, June 2026 — county-level beneficiary counts, stand-alone Part D enrollment and Extra Help counts for Broward, Miami-Dade and Palm Beach. Read October 12, 2026. data.cms.gov — Medicare monthly enrollment
14. Centers for Medicare & Medicaid Services. CY2027 and CY2026 Medicare Advantage / Part D landscape source files — county-level plan counts for Florida. Read October 12, 2026. cms.gov — Part D landscape source files

Disclaimer: JCKC Financial Services is a licensed independent insurance brokerage that also provides tax preparation and notary services. We are not connected with or endorsed by the U.S. government, the Social Security Administration or the federal Medicare program. Cost-of-living adjustments, benefit amounts, earnings test limits, premiums, deductibles and the Part D out-of-pocket cap are set by federal law, the Social Security Administration and CMS, and are subject to change; the 2027 figures here reflect amounts published as of October 16, 2026, and the 2027 Medicare Part A and Part B premiums and deductibles had not been announced at the time of writing. Benefit and premium amounts vary by individual circumstance and should be confirmed with the Social Security Administration or on Medicare.gov before you rely on them. This article is general information only and is not legal, tax, financial or insurance advice, or a substitute for guidance from a licensed professional about your specific situation.