Three anticipated Social Security Administration (SSA) announcements this
October may affect the Social Security benefits for
seniors that many retirees depend on. October is a pivotal month for the
program, since the numbers impacting the next year’s benefits are locked in
during that month and the SSA makes its policy announcements at that time.
If you or a loved one rely on Social Security benefits, here’s what to know
about the anticipated policy changes and how they might affect you.
What to expect in October 2026
The policy announcements should follow the release of third-quarter Consumer
Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data, which is
scheduled to be released on October 14. The SSA depends on CPI-W data to
finalize the Social Security 2027 cost-of-living adjustment (COLA), but that’s
not the only major announcement to watch for.
There’s been lots of discussion about how inflation may impact the 2027 COLA,
but the SSA is also likely to announce the 2027 Medicare Part B premium and
earnings-related thresholds. These policy changes may impact beneficiaries in
several ways.
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1. The 2027 COLA
The COLA is applied to help ensure that Social Security benefits keep up with
inflation, and it’s a highly anticipated announcement this year. The SSA
calculates the COLA based on CPI-W data from the third quarter, including July,
August, and September inflation data. If the data is higher than the same
third-quarter period from last year, the COLA is set as a percentage and helps
boost benefit amounts.
Projections for the 2027 COLA have varied significantly already this year,
thanks to the effects of surging inflation and energy price increases that are
driven by the tensions with Iran. Inflation in June was higher than 2025 inflation,
and unless inflation drops significantly during quarter three, a 2027 COLA may
be applied to increase benefits.
2. Medicare Part B premium
Individuals enrolled in Medicare Part B may also learn of the Part B premiums
this October. Medicare Part B, which covers outpatient medical services,
features a monthly premium that’s dependent on your income. However, the basic
premium typically increases every year as the cost of health care and medications
also grows.
The Medicare trustees report projects that the monthly Part B premium may
increase from $202.90 this year to $209.50. That notably small increase is good
news for retirees who are living on a fixed income, but future increases may be
larger. The trustees’ report projects that premiums may rise faster over the next
eight years, noting that by 2035, premiums may reach $360.50 per month. These
steep increases would leave retirees to find ways to cover the increased cost.
3. Social Security earnings-test limits
Social Security recipients may continue to work while receiving their benefits,
but recipients who claim benefits before reaching the full retirement age must
keep their earnings under an earnings test limit. In 2026, recipients who hadn’t
reached the full retirement age could earn no more than $24,480. Any income
exceeding that limit would result in a reduction of $1 in Social Security
benefits for every $2 earned.
The earnings-test limit often increases each year, so it’s possible that Social
Security recipients may be able to earn more money in 2027 before their benefits
are reduced.
Social Security 2027 wage cap
Another earnings-related threshold comes in the form of a tax wage cap. Social
Security benefits are primarily funded by payroll taxes, but the amount of
income subjected to Social Security taxes is capped. In 2026, the first $184,500
of an individual’s income is taxed, but any earnings beyond that cap are exempt
from Social Security taxes.
It’s possible that the wage cap may increase in 2027, meaning a larger portion
of earnings may be taxed and the Social Security program may generate increased
revenue from those taxes. This wage cap change is likely to only affect high
earners whose annual income exceeds $184,500.
Could the COLA amount to a benefits raise
There’s lots of talk about the potentially increased 2027 COLA, but that doesn’t
necessarily amount to a raise in benefits for retirees. The COLA is meant to
help offset inflation, but since it’s only based on third-quarter data and
inflation has already been climbing throughout the year, many retirees already
feel the impacts of inflation long before the 2027 COLA may take effect. If
benefits are increased, it’s because retirees also face increased living costs,
so higher benefits don’t necessarily give beneficiaries increased buying power.
Additionally, increased Medicare Part B costs may consume a large portion of the
2027 COLA before beneficiaries ever use those benefits to pay for other
expenses. The impact of the COLA partially depends on any potential increase in
Medicare Part B costs.
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Bottom line
October should be a notable time for Social Security, and the policy
announcements may have a significant impact on Social Security beneficiaries. Be
sure to watch for a COLA notice in your my Social Security account in late
November. To see how your benefits compare to this year, look beyond the
headline percentage and check your net figure after your Medicare deduction to
see what you’ll really be taking home.
This is a good time to revisit your 2027 retirement
plan and budget to see if you might need to adjust your spending based on
the new policy announcements.
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Author Details
Chris Lewis, CEPF
Chris Lewis has spent his career turning data into answers. As the Head of Research at FinanceBuzz and a Certified Educator in Personal Finance, he oversees the data journalism and media relations teams, digging into the personal finance topics that shape Americans’ lives at every stage, from Social Security and retirement income to 401(k) strategies, jobs, and real estate.
