The estimates have been circling between 3.4% and 3.6% which would beat this year’s 2.8 and be the largest bump since 2023. On the average retired worker’s check of $2,071 a month, the high end works out to roughly $75 more.

Take the raise. You earned it, and it’s the only inflation-adjusted income most retirees have. But before you spend it twice, let me walk you through the fine print, because a COLA never arrives as advertised.

Medicare eats first

For most retirees, the Part B premium comes straight out of the Social Security check before it ever reaches the bank. That premium is $202.90 this year, and the Medicare trustees project about $209.50 for 2027, with some private forecasters betting the final number, announced in November, comes in higher still.

So bake in that a chunk of your $75 raise is spoken for before you see it. That’s a normal year. In years when the premium jumps and the COLA is small, some retirees’ net increase all but disappears. The headline number is gross. You live on net.

The raise is a rearview mirror

Here’s the part that explains why so many retirees feel poorer even as their checks grow: the COLA is a reimbursement, not a raise. It’s calculated from inflation that already happened, measured from the third quarter of last year to the third quarter of this one. You endured those price increases for a year, out of pocket, and then the adjustment arrives.

It’s also measured on the spending basket of urban wage earners, which is younger and healthier than the typical Social Security household. Retirees spend more of their budget on the categories that have been rising fastest, healthcare chief among them. The COLA keeps you roughly whole against the average American’s costs. Yours may not be average.

A raise can cost you money in Utah

Now the part almost nobody mentions, and it matters more here than in most states.

Utah’s retirement tax credit, worth up to $4,545, phases down past $54,000 of income for single filers and $90,000 for joint filers. Those are hard thresholds, and every COLA nudges more retirees across them. A benefit increase you didn’t ask for can shrink a state credit you were counting on, and the same creep applies federally: The new $6,000 senior deduction starts phasing out at $75,000 for singles and $150,000 for couples, and the income thresholds that determine how much of your Social Security is federally taxable haven’t been adjusted for inflation since the 1980s. Every COLA pushes more of your benefit into taxable territory.

This is what I mean when I say retirement is an income puzzle, not a savings puzzle. When one piece of income moves, four other numbers move with it, and some move against you.

The COLA you haven’t claimed is growing too

Here’s a piece of good news for the folks still waiting to file, and I meet plenty who worry about this: You are not missing out on COLAs by delaying. Your future benefit is adjusted upward from age 62 whether you’ve filed or not. Every adjustment compounds on the bigger base you’re building.

That’s why delay remains the best deal in retirement income. An 8% increase for each year you wait past full retirement age, layered with inflation adjustments, on a check that lasts as long as you do and continues for a surviving spouse. Nothing I can sell you replicates that, which is exactly why my usual advice is to build a bridge to it. Fixed Index Annuities do that job well: Principal isn’t exposed to market losses, and a lifetime income rider can cover the gap years so you can afford to let Social Security ripen to 70. The annuity check, I’ll note honestly, is not inflation-adjusted the way Social Security is. That’s precisely why you maximize the government check and let guaranteed private income handle the base load.

What to actually do on Oct. 14

Write the number down, then do three things with it. Add it to your 2027 income estimate and check the result against the Utah credit thresholds and the IRMAA lines, because those cliffs don’t send warning letters. If you’re planning a Roth conversion this fall, size it with the new benefit amount included. And if the COLA comes in high, remember what a high COLA means: Prices ran hot, and the raise is catching you up, not getting you ahead.

A 3.5% adjustment is welcome. It’s also a receipt for a year of inflation you already paid for. Read it that way, plan accordingly, and the announcement becomes what it should be: one input in a plan, instead of the whole plan.

Lyle Boss, The REAL BOSS Financial, a native Utahn and retirement specialist who has spent decades helping families across Utah and the Mountain West build secure, income-focused retirement plans. Boss Financial, 955 Chambers St. Suite 250, Ogden, UT 84403. Telephone: 801-475-9400. https://www.safemoneylyleboss.com.