A projected 2.8% cost-of-living adjustment could be largely absorbed by Medicare Part B premium increases for retirees.
A 2.8% Social Security cost-of-living adjustment (COLA) for 2027 may add $56 monthly to a $2,000 benefit, but rising Medicare Part B premiums threaten to erase much of the gain. A premium hike similar to 2026’s $18 increase could consume a third or more of the COLA for retirees.
Higher-income beneficiaries face additional IRMAA surcharges, which can reach $689.90 monthly. One-time income events, such as Roth conversions or home sales, may trigger bracket jumps, further reducing net benefits. Social Security uses a two-year lookback to determine premiums, complicating financial planning.
Final figures for 2027 will be announced this fall, but the interplay between COLA and Medicare premiums often leaves retirees with minimal real income growth.