NORA readers will already know about the upcoming 2027 Social Security Cost-of-Living Adjustment (COLA).

The 3.6 percent increase is a well-deserved update to seniors’ retirement checks and will be sent out in just a few months. However, another important change has also been announced.

The taxable maximum, also known as the tax cap, is also changing in the new year.

What is the New Social Security Tax Cap in 2027?

In 2027, the Social Security tax cap will increase from $184,500 to $192,300. While a small increase, this is noteworthy, as it purports to help sustain this program, which has faced well-publicized risks of future insolvency.

What’s the good news? More money will be coming in to fund this program. This is good for current and future retirees. Social Security is a program that almost everyone will depend on at some point. Even for those who don’t need it to survive, more money coming in means more to pay out.

However, there are criticisms of this move as well. First, this change is marginal at best. While it is in line with changes from recent years, this shows only slow and steady progress. Substantial changes will be needed to truly bring benefits to where they should be. In some larger cities, $192,300 is considered an upper-middle-class income. This means the rich still aren’t paying proportionally into the program.

Millionaires and billionaires are not contributing to Social Security. Or at least, they’re not contributing at a level that’s anywhere close to their income. We will continue to push for changes that reflect the needs of Social Security. After all, it’s only fair that this program is supported by everyone, since everyone has a right to a fair retirement.

What are your thoughts on the tax cap increase? Let us know on Facebook and Twitter. Be sure to follow us for more news on program updates for 2027.