The 2027 COLA Adds About $X to the Average Social Security Check. The Part B Premium Takes $Y of It Back, and for Anyone Paying IRMAA the Entire Raise Is Gone
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Social Security’s 2027 raise is set: a 3.6% inflation adjustment. For the average retired worker, the monthly check rises from $2,095 to $2,170, a raise of about $75.
Medicare takes its cut first. The Part B premium comes straight out of most Social Security checks. Retirees who also pay the income-related surcharge known as IRMAA can lose the whole raise, and then some.
Medicare Part B Claims Its Share of the $75 First
The standard Part B premium for 2026 is $202.90, up $17.90 from $185 in 2025. The 2027 premium is still pending. If 2027 brings another $17.90 jump, the average retiree keeps about $57 of the raise each month, or roughly $685 over the year.
Couples get hit twice. The average aged couple’s combined benefit rises from $3,238 to $3,355, an increase of $117, and each spouse pays a separate premium.
That’s the mild version. The Social Security Act’s hold-harmless provision says that for most beneficiaries, the dollar increase in Part B can’t exceed the dollar increase in their check, so the net payment never shrinks. IRMAA payers don’t get that protection.
How IRMAA Turns a $75 Raise Into a Monthly Loss
IRMAA stands for income-related monthly adjustment amount. It’s a surcharge added to Part B and Part D premiums, and it hits roughly 8% of Part B enrollees. It works like a cliff. Under the 2026 levels, an individual with modified adjusted gross income (MAGI) of $109,000 pays no surcharge. One dollar more adds $81.20 to Part B and $14.50 to Part D. For joint filers, the line is $218,000.
Take a hypothetical 70-year-old single retiree who receives the average $2,170 in 2027. In 2025, an extra IRA withdrawal pushed her MAGI just past the first levels. Here’s her math, using the 2026 levels (2027 thresholds get an inflation adjustment and haven’t been published yet):
| Monthly item | Amount |
|---|---|
| 2027 COLA raise | +$75.00 |
| Part B IRMAA surcharge | -$81.20 |
| Part D IRMAA surcharge | -$14.50 |
| Net monthly change | -$20.70 |
Over 12 months she pays $1,148.40 in surcharges and gets a $900 raise, leaving her $248.40 behind. And that’s before any increase in the standard premium.
Your 2025 Income Sets Your 2027 Medicare Bill
Medicare sets IRMAA using your tax return from two years earlier. That means your 2027 premiums depend on your 2025 MAGI, and that year is already over. A 2025 Roth conversion, home-sale gain or large required minimum distribution (RMD) shows up as a 2027 surcharge.
Surcharges also grow with the standard premium. For single filers with MAGI between $205,000 and $500,000, the total premium is $649.20, about 3.2 times the standard rate. Another $17.90 standard increase would cost that retiree about $57 more a month. Federal tax on the raise takes about $15.30 more (assuming the 24% bracket and 85% of benefits taxable), leaving roughly $2.
Frozen Tax Thresholds Take Another Slice of Each COLA
Section 86 of the Internal Revenue Code determines how much of your benefit is taxable. It starts with provisional income, which is half your benefits plus your other income, including tax-exempt interest. Up to 50% of benefits become taxable above $25,000 for single filers ($32,000 joint). Up to 85% become taxable above $34,000 ($44,000 joint).
Those dollar amounts are written into the law and don’t rise with inflation. Every COLA pushes more retirees past them, and anyone already over the 85% line pays tax on 85% of each new benefit dollar.
Three Moves That Shrink Your Medicare Bill
- File Form SSA-44 if your income dropped. Social Security will recalculate IRMAA using more recent income after a life-changing event, such as stopping or cutting back work, marriage, divorce, a spouse’s death or the loss of pension income.
- Plan your MAGI two years ahead. Check the levels lines before a Roth conversion or a capital-gains sale. Getting $1 under a levels saves the surcharge for the whole year.
- Use qualified charitable distributions. Starting at age 70½, you can send IRA money directly to charity. It counts toward your RMD and stays out of AGI, so it doesn’t raise your MAGI for IRMAA or your provisional income.
Next, look for the CMS announcement of the 2027 Part B premium and IRMAA levels, then compare it with the benefit notice Social Security sends late in the year. Whether a Roth conversion this year is worth a surcharge in 2028 is math worth running with a professional (we mapped out IRMAA and the rest of Medicare’s surprise bills in a free guide here).
Contact [email protected] for any questions or corrections.
Vilma Rios is a tax professional, tax researcher, and financial writer with more than 15 years of experience in tax and accounting. Her work spans federal tax research, financial journalism, retirement planning, investment taxation, capital gains, inherited assets, and tax education. She specializes in translating complex tax and financial topics into clear, practical information that helps individuals, families, retirees, and investors make informed decisions.
She has presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as "Your Tax Geek," Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
