The Senior Citizens League currently projects a 3.6% cost of living adjustment for Social Security in 2027. On the average benefit that works out to roughly $75 a month. It is a better raise than this year's 2.8%. Then Medicare takes its cut, and the number you actually see in January is smaller than the number in the headline.

The Two Announcements That Matter

The COLA is not final. It is calculated from the CPI-W inflation reading for July, August and September, and only one of those months is in the books. That reading came in at 3.4%. The official figure arrives in mid-October, and forecasts have been moving. In June the same group projected 3.8%, then trimmed it to 3.6% as energy prices eased.

The second announcement comes in November, when Medicare sets its premiums. The Trustees Report projects the standard Part B premium rising from $202.90 to $209.50, with the annual deductible going from $283 to $292.

Do the Subtraction

A $75 monthly raise, minus $6.60 of Part B premium, leaves about $68. Medicare takes roughly nine cents of every dollar the COLA gives.

That is the visible part. The larger issue is that Part B is deducted directly from the benefit before it reaches your account, so the increase never shows up as a bill you notice. It just makes the raise smaller than expected, quietly, in a month when you were expecting relief.

Why the Adjustment Keeps Feeling Short

The COLA is tied to CPI-W, an index built on the spending patterns of urban wage earners. Retirees spend differently. Health care and housing take a bigger share of a retired household's budget than they do of a working one, and both have been running hotter than the overall index for years.

That mismatch compounds. Each year the adjustment tracks a basket that is not quite yours, and each year the gap carries forward into the base for the next calculation.

Final Take

Two dates are worth marking. Mid-October brings the official COLA. November brings the Medicare premium. Only after both do you know what your January deposit actually looks like.

There is one thing worth doing before then. Medicare open enrollment runs from October 15 to December 7, and it is the window where changes are actually available. Part D drug plans and Medicare Advantage plans revise their formularies and networks every year, and a plan that fit last year may not fit now. Checking whether your prescriptions are still covered at the same tier is the single highest value hour most people can spend in the fall.

The COLA is not something you can influence. The plan you are enrolled in is, and the savings available there are usually larger than the raise being debated.

Written by Deniss Slinkins
Millionaire Core