Social Security COLA and Benefit Limits for 2026 and 2027

The cost-of-living adjustment is a formula, not a decision. SSA compares the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July through September against the same quarter a year earlier, and rounds the change to the nearest tenth of a percent. For 2027 that produced 3.6 percent. It applies to Social Security benefits starting with January 2027 payments, and SSA says SSI payments reflect it beginning December 31, 2026. For the story behind this year's number and what it does to a typical check, see our article on the 2027 COLA.

The taxable maximum is the most wages that count for Social Security tax and for your benefit calculation in a year. It is $192,300 for 2027 and was $184,500 for 2026. Employees pay 6.2 percent of wages up to the maximum and employers match it, so the most an employee pays in 2027 is $11,922.60, versus $11,439.00 in 2026. Self-employed people pay both halves, 12.4 percent. Medicare tax has no maximum: 1.45 percent from the employee, 1.45 percent from the employer, plus an additional 0.9 percent on wages above $200,000 for single filers and $250,000 for joint filers, and those two thresholds are not indexed. Earnings above the taxable maximum do not add to your benefit.

The retirement earnings test only applies if you collect benefits before full retirement age and keep working. In 2027, SSA withholds $1 of benefits for every $2 you earn above $25,560. In the calendar year you reach full retirement age, it withholds $1 for every $3 you earn above $67,920, and only counts earnings before the month you reach it. As an illustration, a 63-year-old earning $35,000 in 2027 is $9,440 over the limit, so about $4,720 of benefits would be withheld. Someone reaching full retirement age in 2027 who earned $80,000 before the month they reach it is $12,080 over, so about $4,027 would be withheld. Withheld benefits are not simply lost: SSA recalculates your benefit at full retirement age to credit the months it withheld. After you reach full retirement age, the earnings test no longer applies.

Work credits decide whether you qualify at all. In 2027, $1,970 of covered earnings buys one credit, and you can earn at most four credits a year, which takes $7,880. For 2026 the amounts were $1,890 per credit and $7,560 for four. Retirement benefits generally require 40 credits, about ten years of work. Disability and survivor benefits have their own credit rules, so confirm yours with SSA. Your benefit amount is then built from your 35 highest years of indexed earnings, so working past ten years matters mainly because a zero year in that 35-year average drags the result down.

Claiming age is the largest lever, and it is set by law, not by the COLA. Full retirement age is 67 for anyone born in 1960 or later. Claiming at 62 pays 70 percent of your full retirement age benefit, and each year you wait past full retirement age earns about 8 percent more, reaching 124 percent at 70. The COLA then applies to whichever base you locked in. A spouse can receive up to 50 percent of the worker's full retirement age benefit, and a surviving spouse can receive up to 100 percent of what the deceased worker was getting, which is why the higher earner's claiming age protects the survivor. SSA lists the maximum benefit for a worker retiring at full retirement age at $4,188 a month in 2027, up from $4,152. Almost no one earns the maximum, so use your own statement.

Three other numbers are worth knowing. For SSI, the federal payment standard is $1,029 a month for an individual and $1,544 for a couple in 2027, and the resource limit for an individual stays at $2,000. For disability and the work incentives tied to it, substantial gainful activity was $1,690 a month for 2026 ($2,830 if blind), and SSA had not published 2027 amounts when this page was last updated. For Medicare, the 2026 standard Part B premium is $202.90 a month, and the Medicare Trustees project $209.50 for 2027. That 2027 figure is a projection until CMS announces the official premium, usually in the fall, and the premium is deducted from your Social Security payment before you receive it.

If you are already collecting, translate the COLA into your own dollars before you change a budget. Multiply your current benefit by 3.6 percent, then subtract any increase in your Medicare premium once CMS confirms it. As an illustration, a $2,400 benefit rises by $86.40 to $2,486.40, and if the Part B premium goes up by the projected $6.60, the net gain is about $79.80. SSA mails your exact new amount in December, and you can also see it in your my Social Security account.

If you are working and have not reached full retirement age, decide before you claim whether the earnings test will bite. The 2027 limit of $25,560 is low relative to most pre-retiree incomes, and claiming at 62 while earning a salary can mean most of your benefit is withheld for years. For many people, the cleaner choice is to keep working and claim later, or to claim only once earnings drop below the limit. The test disappears at full retirement age, so the cost of getting this wrong is temporary but real.

If you are a high earner, remember that the taxable maximum is a cap on both tax and benefit credit. Wages above $192,300 are not taxed for Social Security in 2027 and do not raise your benefit, but the 0.9 percent additional Medicare tax still applies above its own thresholds. For business owners, how you split pay between salary and distributions changes how much of your income ever counts toward Social Security.

Use claiming age as a planning tool, not a default. The 62-to-70 range spans 70 percent to 124 percent of your full retirement age benefit, and the right answer depends on health, other income, marital status and the survivor benefit. The years before you claim are often the best window for Roth conversions, because lower taxable income leaves room in the brackets. Then check your plan against tax thresholds: up to 85 percent of your benefit can be taxable federally, using thresholds that are not indexed, while Arizona does not tax Social Security benefits. Check back each fall, because this page is updated when SSA and CMS publish new figures.

• Using the COLA percentage as your net raise, when the Medicare Part B premium comes out of your payment first and the 2027 premium is not yet official.
• Claiming at 62 while still earning above the earnings test limit, then being surprised when benefits are withheld.
• Assuming withheld benefits are gone forever, when SSA recalculates your benefit at full retirement age to credit the withheld months.
• Quoting the maximum benefit as if it applies to most people, when it requires 35 years of earnings at or above the taxable maximum.
• Mixing up the taxable maximum with the cap on benefits, when earnings above $192,300 are not taxed for Social Security and do not add to your benefit.
• Treating the claiming-age percentages as indexed to the COLA, when 70 percent at 62 and 124 percent at 70 are set by law for those born in 1960 or later.
• Relying on an old copy of these figures, when nearly every dollar threshold on this page changes each October.