The taxable maximum rises from $184,500. The earnings limits for working beneficiaries rise too.
By Finance Unc ·
The maximum amount of earnings subject to Social Security tax will rise to $192,300 in 2027, from $184,500 in 2026, the Social Security Administration announced alongside the 3.6 percent cost-of-living adjustment.
Workers and employers each pay 6.2 percent on wages up to that amount, so the most an employee can owe in Social Security tax rises from $11,439 to $11,922.60, with the employer paying the same. Self-employed people pay both halves, 12.4 percent, up to the same cap. The separate Medicare tax has no cap.
The earnings test for people collecting benefits before full retirement age also rises. If you are under full retirement age all year, you can earn $25,560 in 2027 before Social Security withholds $1 for every $2 above that. In the year you reach full retirement age, the limit is $67,920, with $1 withheld for every $3 above it, counting only earnings before the month you reach that age. Once you are at full retirement age, there is no limit.
For payroll and budgeting, the new cap takes effect with wages paid in January 2027.
The largest cost-of-living adjustment since 2023 reaches checks in January. Medicare's 2027 Part B premium, which comes out of many of those checks, has not been announced yet.
By Finance Unc ·
Monthly Social Security benefits and Supplemental Security Income payments will rise 3.6 percent in 2027, the Social Security Administration announced October 14. The increase reaches nearly 72 million Social Security beneficiaries starting with January 2027 benefits, and about 7.3 million SSI recipients starting with payments on December 31, 2026.
It is the largest adjustment since 2023 and up from 2.8 percent for 2026. The agency puts the average increase for retired workers at about $75 a month. The adjustment follows the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of last year to the third quarter of this year, which is why it arrives with September's inflation report.
What it means for your check depends on Medicare. Part B premiums are usually deducted from Social Security payments, and the 2027 premium has not been announced; it is expected in the coming weeks. Until then, nobody can tell you their exact net increase.
You do not have to do anything to get the raise. If you create a my Social Security account and opt into digital notices by November 18, you can see your new benefit online up to three weeks before the mailed notice arrives.
The window to switch drug plans or move between Original Medicare and Medicare Advantage opens today.
By Finance Unc ·
Medicare's Open Enrollment period for 2027 coverage runs from October 15 through December 7. During it, people with Medicare can switch from Original Medicare to a Medicare Advantage plan or back, change Medicare Advantage plans, and join, switch or drop a Part D drug plan. Changes take effect January 1.
Plans change their premiums, deductibles, covered drugs and pharmacy networks every year, and your plan should have sent you an Annual Notice of Change. Read it: a drug that is covered this year may not be next year, or may move to a more expensive tier. If you do nothing, you are generally renewed into the same plan for 2027.
The Medicare Plan Finder on Medicare.gov compares plans using the drugs you actually take. Free, unbiased counseling is available through your state's State Health Insurance Assistance Program. Medicare's 2027 Part B premium and deductible have not been announced yet.