There are 3 major Social Security changes coming in 2027: What you need to know

Key Points:

• Social Security and Supplemental Security Income beneficiaries will receive a 3.6% cost of living adjustment (COLA) in 2027, marking the largest increase in four years and adding about $75 monthly for average retirees.
• The 3.6% COLA is the fifth-largest increase in the past 35 years, following notable hikes in 2022, 2021, 2008, and 2005, with payments starting in January 2027 for most recipients and December 31, 2026, for SSI recipients.
• The maximum amount of earnings subject to Social Security tax will rise to $192,300 in 2027, up from $184,500 in 2026, meaning wages above this threshold will not be taxed for Social Security purposes.
• Earnings limits for beneficiaries under full retirement age (67 for those born in 1960 or later) will increase to $25,560 in 2027, with benefits reduced by $1 for every $2 earned above this amount.
• For individuals reaching full retirement age in 2027, the earnings limit will increase to $67,920, with a $1 benefit reduction for every $3 earned over the limit until the month before reaching full retirement age; there is no earnings limit once full retirement age is reached.