2027 Social Security and projected covered compensation figures 

October 19, 2026

Social Security benefits payable will increase by 3.6% in 2027, the Social Security Administration (SSA) announced on October 14 in updates that include the 2027 taxable wage base and the 2024 national average wage. IRS has not yet issued 2027 covered compensation amounts, but Marsh has projected those figures using the published taxable wage base.

The 3.6% cost-of-living increase for 2027 Social Security benefits reflects the change in the third-quarter Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from 2025 to 2026. Other 2027 Social Security amounts are tied to the 4.23% increase in average annual wages from 2024 to 2025. The following table shows key Social Security values for 2025–2027 from SSA’s 2027 fact sheet and automatic determinations webpage.

Qualified defined benefit (DB) pension plans use covered compensation to determine “permitted disparity” under Section 401(l) design-based safe harbor rules and “imputed disparity” under Section 401(a)(4) general nondiscrimination testing rules. Covered compensation is the average Old-Age, Survivors and Disability Insurance (OASDI) contribution and benefit base for the 35 years ending with the year the employee reaches Social Security retirement age. Qualified plans have the option to determine permitted or imputed disparity using either actual or rounded covered compensation.

IRS has not yet issued 2027 covered compensation tables, but Marsh has projected these amounts based on the increase in the taxable wage base to $192,300 for 2027 from $184,500 for 2026. The table below shows covered compensation amounts for individuals who have already reached Social Security full retirement age. (At that age, covered compensation becomes fixed and is no longer affected by annual changes in the OASDI contribution and benefit base.)

The next table shows Marsh’s projected 2027 amounts for individuals below Social Security full retirement age.