You open the envelope from Social Security in December and see a 3.6% raise. Nice, right? Then January comes, and the deposit in your bank account looks smaller than you expected. Why? Medicare takes its Part B premium out of your check before you ever see it.
This guide walks through the 2027 COLA Medicare premium math in plain English. You'll see how much of your raise you could actually keep, and what to do before open enrollment ends on December 7.
🔑 Key Takeaways for Retirees
- The 2027 COLA is 3.6%, about $75 more per month for the average retired worker.
- The 2026 Part B premium is $202.90. The 2027 amount isn't set yet.
- In our scenarios, you keep roughly 60% to 87% of the raise after Medicare takes its share.
- Open enrollment runs October 15 to December 7, so you still have time to compare plans.
How Much of Your 2027 COLA Will Medicare Actually Take?
Social Security's 2027 COLA is 3.6%, about $75 more per month for the average retiree. Medicare won't announce its 2027 Part B premium until later this fall. Last year's premium jumped $17.90, so Medicare could claim a real slice of that raise.
Let's look at the real numbers. The Social Security Administration announced the cost-of-living adjustment (COLA) on October 14, 2026. It's the largest raise since 2023, and it follows a 2.8% COLA for 2026. For the average retired worker, the monthly benefit moves from $2,095 to $2,170 in January 2027.
Here's the catch. Most people on Medicare pay their Part B premium straight out of their Social Security check. You never handle that money. Your deposit is the benefit minus the premium.
In 2026, the standard Part B premium is $202.90 a month. That's up $17.90 from $185 in 2025, a 9.7% jump. Social Security's raise that year was only 2.8%. So the premium grew more than three times as fast as the COLA.
Will 2027 repeat that pattern? Nobody knows yet. CMS usually releases the new premium in November. Until then, plan with a range instead of a guess. A $75 raise doesn't mean $75 of new spending money, because every dollar added to your premium comes out of that raise first.
The 2027 COLA at a Glance
Here are the official numbers from the SSA fact sheet, so you can check them against your own situation.
- COLA: 3.6%, based on the CPI-W (a price index for urban wage earners) from the third quarter of 2025 through the third quarter of 2026.
- Average retired worker: $2,095 before the COLA, $2,170 after. That's about $75 more each month.
- Average retired couple, both receiving benefits: $3,238 before, $3,355 after. That's about $117 more.
- Start date: The new amounts show up in your January 2027 payments.
When Will You See Your Exact Number?
You don't need to apply for anything. The increase is automatic. SSA says people enrolled in Medicare can see their 2027 benefit amount in the my Social Security Message Center starting in late November. If you don't have an account yet, set one up now at SSA.gov.
Still Working While You Collect?
The earnings test limits rise too. In 2027, if you're under full retirement age (FRA) all year, SSA withholds $1 for every $2 you earn above $25,560. In the year you reach FRA, the limit is $67,920, and SSA withholds $1 for every $3 above it. We covered the details in our guide to the Social Security earnings limit if you work after 62.
Three Premium Scenarios: What You Keep From the $75
CMS hasn't set the 2027 Part B premium, so nobody can give you an exact take-home number today. What we can do is test a few possibilities against the average $75 raise.
| If the premium rises by | New monthly premium | Net gain from $75 COLA | Share of raise you keep |
|---|---|---|---|
| $10.00 | $212.90 | $65.00 | 86.7% |
| $17.90 (same as 2026) | $220.80 | $57.10 | 76.1% |
| $20.00 | $222.90 | $55.00 | 73.3% |
| $30.00 | $232.90 | $45.00 | 60.0% |
These are illustrations, not forecasts. They use the average benefit and the standard premium. Your own numbers will differ.
Notice the pattern. Each extra $10 in premium costs you $10 a month, and it adds up to $120 over a year. Even in the harshest scenario here, you still come out ahead. But the raise feels a lot smaller than the headline suggests.
Why does the premium move at all? CMS sets it every year to cover projected Part B costs. For 2026, the agency pointed to higher prices and more use of medical services. That's why the number can swing from one year to the next.
Want your own estimate? Multiply your current monthly benefit by 0.036. Then subtract whatever the premium increase turns out to be once CMS announces it.
Hypothetical Example: Frank and Linda From Ohio
Let's put real dollars on it. The couple below is fictional, but their benefits match the SSA averages for a retired couple.
🧮 Hypothetical Example (Not a Real Couple)
Frank, 68, and Linda, 67, live in Ohio. Both are retired and both are on Medicare.
- 2026 benefits: Frank $1,900 + Linda $1,338 = $3,238
- 2027 benefits (3.6% COLA): Frank $1,968.40 + Linda $1,386.17 = $3,354.57
- 2026 Part B premiums: 2 x $202.90 = $405.80
- 2027 Part B premiums if each rises $20: 2 x $222.90 = $445.80
- Take-home in 2026: $3,238 - $405.80 = $2,832.20
- Take-home in 2027: $3,354.57 - $445.80 = $2,908.77
Result: Their gross raise is $116.57 a month. After higher premiums, they keep $76.57, or about 66%.
That's before income taxes, Part D drug plans, and any Medigap premiums. Those costs can shift the picture too.
Look at Linda's side of the math. Her raise is only $48.17 a month, and a $20 premium increase takes more than 41% of it. Smaller checks feel premium changes harder, even when the dollar increase is the same for everyone.
The big lesson? Two people on Medicare pay two premiums. A household with both spouses enrolled feels every premium dollar twice. When you budget for 2027, count each person's premium separately.
The Hold Harmless Rule and Your 3-Step Plan
Who Gets Protection?
A federal safeguard called the hold harmless rule helps some people. If your Part B premium comes out of your Social Security check, and the premium increase would be bigger than your COLA raise in dollars, your benefit generally can't fall below last year's amount.
It doesn't cover everyone. It generally doesn't apply if you're new to Part B, if you pay the income-related surcharge (IRMAA), or if you pay Medicare directly. For the average retiree with a $75 raise, the premium would have to jump by more than $75 to trigger it. That matters most for people with small benefits.
💡 Essential Retirement Tip: Don't spend the full raise until you see the Part B number. In our scenarios, you keep between 60% and 87% of it. Budget for the low end, and treat anything extra as a bonus.
Your 3-Step Checklist
☑️ Step 1: Compare your drug and health plans at Medicare.gov before December 7. Plan costs change every year.
☑️ Step 2: Watch for the 2027 Part B premium in November. Then run the math: your benefit x 0.036, minus the premium increase.
☑️ Step 3: If your income dropped because you retired or lost a spouse, ask SSA about Form SSA-44. It can lower an income-related premium surcharge after a life-changing event.
Your claiming age also shapes the base your COLA applies to. If you haven't claimed yet, read our breakdown of when to claim Social Security before you decide.
Frequently Asked Questions
When will I know my exact 2027 Social Security check?
SSA says people enrolled in Medicare can see their 2027 benefit amount in the my Social Security Message Center starting in late November. The higher payments begin in January 2027.
Do I have to apply for the 3.6% COLA?
No. The increase is automatic for Social Security and SSI recipients. You don't need to file anything or call anyone.
Could Medicare take my entire raise?
That's unlikely for most retirees. In our scenarios, premium increases of $10 to $30 leave you $45 to $65 of the $75 average raise. The hold harmless rule also protects some people if a premium hike would outpace their COLA.
Official Sources
- SSA: 2027 Cost-of-Living Adjustment Fact Sheet
- Federal Register: 2026 Medicare Part B Premium and Deductible Notice
- Medicare.gov
- SSA.gov
About the Author: Written by [AUTHOR NAME], [ONE HONEST LINE ABOUT YOU, e.g. "an independent writer who covers Social Security and Medicare news using SSA and CMS sources"].
Disclaimer: The information on WealthWise Living is for educational purposes only and isn't financial, tax, or legal advice. Examples are hypothetical. Always check your personal situation with a Certified Financial Planner (CFP), SSA.gov, or Medicare.gov.