What the 3.6% Social Security Raise Means for You | Robby Lewis
By: Robby Lewis
Social Security benefits will increase 3.6% in 2027, which is the largest cost of living adjustment since 2023. For the average retiree, that is about $75 more per month, starting in January. The adjustment is based on a government inflation measure that tracks the spending of working households, which is why many retirees feel it does not fully match their own costs, especially for healthcare and housing.
Keep in mind that the raise on paper is not always the raise you feel. Medicare Part B premiums are usually deducted straight from your Social Security check, and they are expected to rise next year too. The final number has not been announced, but Medicare's trustees have estimated an increase of about $6.60 a month. Part D drug plan costs may go up for some people as well.
There is also a tax piece. The income thresholds that determine how much of your Social Security is taxable are not adjusted for inflation, so more of your benefit can become taxable over time. If you are drawing from IRAs or 401(k)s, it is worth coordinating those withdrawals with your benefit so you are not surprised at tax time.
If you are still working, there is one more change to know about. The amount of earnings subject to Social Security payroll tax is rising 4.2% to $192,300 in 2027. Higher earners, including many with RSU income, will pay a bit more in Social Security tax as a result.
The COLA is a helpful boost, but it is best viewed as one piece of your overall retirement income, not the whole plan. If you have questions about how any of this affects you, reach out and we can walk through it together.
Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California and is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration requirements. Additional information about the firm is available on the SEC’s Investment Adviser Public Disclosure website at adviserinfo.sec.gov.
Robby Lewis is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 06/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This material is for general information only and is not intended to provide specific tax or investment advice. Consult your tax professional regarding your individual situation. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."
