Social Security Is Increasing in 2027: How Much Will You Actually Keep?

Social Security is going up 3.6% in 2027. For the average retired worker, that means about $75 more a month starting in January.

That’s welcome news. But before you count on an extra $900 to spend next year, it pays to check how Medicare and taxes will affect your increase.

Start With Your Monthly Benefit

To estimate your increase, multiply your current benefit by 3.6%. Use your gross benefit, which is the amount before Medicare premiums and tax withholding. You can find that amount on your Social Security benefit notice.

For example, if your monthly benefit is $2,500, your increase would be about $90 a month, bringing your benefit to $2,590 before deductions. If you and your spouse both collect Social Security, calculate the increase for each of you.

Medicare May Take a Piece

Most people who collect Social Security and have Medicare Part B pay their premium through an automatic deduction from their monthly check.

The standard Part B premium is $202.90 a month in 2026. Medicare’s trustees project it will rise to $209.50 for 2027, though the final amount has not been announced as of October 18, 2026.

If that projection holds, the premium would go up by $6.60 a month. So if you receive a $90 Social Security increase, you’d have about $83.40 more each month after the Medicare adjustment, before any change in tax withholding.

Higher-income retirees may also pay Medicare surcharges, known as IRMAA. Medicare generally uses your tax return from two years earlier. That means your 2025 income will typically determine whether you pay a surcharge in 2027.

That timing matters for your planning now. A large IRA withdrawal or Roth conversion in 2026 could increase your Medicare premiums in 2028.

Check What Happens to Your Taxes

A bigger Social Security check can also mean a slightly higher tax bill.

To figure out how much of your benefit is taxable, the IRS looks at your “combined income,” which generally includes your adjusted gross income, tax-exempt interest, and half of your Social Security benefits.

Your benefits can begin becoming taxable when combined income exceeds $25,000 for a single filer or $32,000 for a married couple filing jointly. Those thresholds aren’t adjusted for inflation, so a Social Security increase can leave more of your benefits subject to tax.

Depending on your total income, up to 85% of your benefit can be included in taxable income. That does not mean an 85% tax rate. It means that portion is subject to your applicable income tax rates. Your deductions also affect what you ultimately owe.

You don’t need to memorize the IRS formula. You just need to factor your higher Social Security benefit into next year’s tax projection, especially if you also receive a pension or take withdrawals from retirement accounts.

If you’re considering moving IRA money into a Roth this fall, our article on Roth Conversions After Retirement and Before RMDs walks through the key tradeoffs.

Decide Whether Your Withdrawals Should Change

In some years, a bigger Social Security check allows you to pull a little less from your investment accounts. In other years, higher grocery, property insurance, and healthcare bills eat up the difference.

Before January arrives, I’d review three things:

• Your new deposit after Medicare premiums and tax withholding.
• Your expected spending for the coming year.
• Your portfolio withdrawals and whether the monthly amount still makes sense.

The COLA is designed to help your benefits keep pace with inflation. How much breathing room it gives you depends on your own expenses and the rest of your retirement income.

At Martin Wealth Solutions, we look at Social Security alongside your investments, taxes, and healthcare costs to help you understand what you can comfortably spend. If you’d like help figuring out what the 2027 numbers mean for your plan, start a conversation with our team.

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This article is for educational purposes only and is not individualized investment, tax, or legal advice. Information is current as of October 18, 2026. The 2027 Medicare Part B premium discussed is a projection and is subject to final confirmation. Your benefits, taxes, and Medicare premiums depend on your circumstances. Consult your financial advisor and tax professional before changing retirement withdrawals or making a Roth conversion.

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