The month of October -- specifically, mid-October -- matters to Social Security recipients because that's the time when the Social Security Administration (SSA) announces the cost-of-living adjustment (COLA) for the following year. COLAs are based on how inflation impacts everyday Americans, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
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Why it matters
Consider this: For a Social Security recipient with a $2,071 monthly benefit, a 3.9% increase will boost their payment by roughly $81. However, that's before taxes and Medicare premium increases are deducted.
Still, for someone living on a fixed income, every dollar counts, particularly for those who don't have other income sources, such as a retirement plan, to draw from. Knowing how much more they can expect to receive in 2027 may help ease a recipient's mind as they face increases in other expenses, such as rent or property taxes. Knowing how much they're working with can help them create a realistic budget for the upcoming year and may lead them to trim expenses where they can.
It's not all about COLAs
Fall is also when Social Security recipients learn about other changes, including:
- Timing: While Supplemental Security Income (SSI) recipients typically receive their first COLA-adjusted payment at the end of December, retirement and Social Security Disability Insurance (SSDI) recipients don't see a change in their checks until January. However, if there are any changes to this schedule on the horizon, recipients will learn about them in October.
- Medicare premiums and offsets: Around the same time, the Centers for Medicare & Medicaid Services (CMS) announces the standard Medicare Part B premium. This is important information to have, because Social Security recipients immediately know how much the higher healthcare premium will reduce the real-life impact of their COLA.
Other big announcements
- New earnings test thresholds: Recipients who haven't reached full retirement age (FRA) yet will learn how much they can earn from work before benefits are temporarily reduced.
- SSDI income limits and trial work periods (TWP): Refers to how long an SSDI recipient can test their ability to work without losing disability benefits.
- Maximum taxable wage base for Social Security: How much of a person's wages are subject to Social Security taxes in the upcoming year.
- How much workers need to earn: Those who are still employed learn how much they're required to earn in work credits toward future Social Security eligibility.
It's in the fall that nearly anything a person might want to know about Social Security changes is announced, and it all kicks off in October.
