Social Security's Biggest Announcement of the Year Is Less Than 1 Month Away. Here's What to Expect
Key Points
On Oct. 14, the Social Security Administration is set to announce an official 2027 COLA.
Other program changes should be revealed, too.
Social Security changes don't just impact retirees, so working Americans should also tune in.
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When it comes to retirement finances, October is often an important month. Not only does Medicare's annual open enrollment period begin, but it's also when the Social Security Administration (SSA) typically announces an official cost-of-living adjustment (COLA) for the new year.
At this point, we're less than one month away from that news. Social Security COLAs are based on third-quarter inflation data. And September's Consumer Price Index is expected to be released on Oct. 14.
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Once that happens, the SSA should be in a position not only to share an official 2027 COLA but also to unveil other key program updates. And some of those updates could impact workers more so than retirees, which is why all Americans need to pay attention.
Big changes are coming
You may be aware that the SSA will be sharing an official COLA number on Oct. 14. But on top of that news, here are some other things to look out for:
- A new maximum monthly benefit
- A new limit for the earnings test, which applies to Social Security recipients who work and collect benefits before full retirement age
- A new wage cap, which determines how much earnings will be taxed in 2027 to fund Social Security
- A new work credit value, which dictates how much money needs to be earned to get a single credit (40 lifetime credits are needed to qualify for Social Security in retirement)
In a nutshell, you can expect all these numbers to increase. Social Security's maximum monthly benefit should rise because a COLA will be applied to it. And the earnings-test limit, wage cap, and work credit value should increase in line with wage growth.
Seniors may not get the full picture in October
While the SSA's Oct. 14 announcement could arm workers with the information they need to prepare financially for the new year, seniors might remain in the dark on one key thing: the cost of Medicare.
Dual enrollees in Social Security and Medicare pay for Part B out of their monthly benefits. When the cost of Part B increases, the net raise is smaller.
Even though the SSA should be announcing a COLA in mid-October, beneficiaries may not be able to calculate their total raise until Medicare shares what Part B will cost in the new year. That may not happen for several weeks afterward, so seniors may unfortunately end up stuck in limbo for a while.
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