Social Security benefits in 2027: See what's really changing

Social Security benefits in the United States are set to undergo several changes in 2027. The full retirement age, which has reached a long and slow climb to 67 for those born in 1960 or later, will remain at 67. This means that individuals born in 1960 or later will not experience any further increase in their full retirement age.

The cost-of-living adjustment (COLA), which is the annual adjustment to benefits based on inflation, is expected to be around 3.5% for 2027. This would result in an increase of approximately $73 for the average monthly Social Security benefit of $2,000, and $68 for a surviving spouse with an average monthly benefit of $1,933. For Social Security Disability Insurance recipients, the increase would be around $57 per month.

If the COLA reaches around 3.6%, it would be the largest increase since 2023. However, it is important to note that a COLA is not a raise, but rather a catch-up for inflation that has already been paid for. Additionally, the 2026 maximum taxable earnings cap for Social Security benefits is expected to increase to around $190,200 in 2027, which means an additional $5,700 in income may be subject to Social Security tax.

The earnings test limits for those who claim benefits before reaching full retirement age but are still working may also increase. The lower threshold is expected to rise from $24,480 to $25,200, while the upper threshold is likely to move from approximately $65,160 to near $67,200. However, these changes are anticipated to have minimal impact on most retirees who are simply collecting a check.

Social Security benefits are not scheduled for cuts in 2027, and the system's financial stability is not expected to be an issue until around 2032.