The Social Security Administration (SSA) has announced a 3.6% cost-of-living adjustment (COLA) for 2027. The increase will provide millions of Americans with higher monthly benefits starting in January.
The adjustment, announced Wednesday, is the largest annual increase in four years. It is expected to add approximately $75 to the average monthly Social Security payment.
According to CBS News, the average monthly benefit will rise to approximately $2,170.
Nearly 72 million Social Security beneficiaries will receive the increase beginning in January 2027. About 7.3 million Supplemental Security Income (SSI) recipients will see their higher payments starting December 31, 2026.
In total, the SSA said the adjustment will benefit approximately 76 million Americans across the two programs.
Social Security Commissioner Frank Bisignano said the increase would provide greater financial stability for recipients. He also credited President Donald Trump’s administration with improving the agency’s services.
The 3.6% adjustment represents an increase from the 2.8% COLA implemented in 2026. However, it remains below the 8.7% increase that took effect in 2023, when inflation was significantly higher.
The announcement came on the same day the Labor Department reported that annual inflation reached 3.7% in September, exceeding economists’ expectations.
Social Security’s annual COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The formula measures inflation during July, August, and September to determine the following year’s benefit increase.
The adjustment is intended to help retirees and people with disabilities maintain their purchasing power as prices rise.
However, some advocates argue that the increase may not be sufficient to offset higher living expenses.
Shannon Benton, executive director of the Senior Citizens League, told CBS News that the 3.6% adjustment would not necessarily restore purchasing power that retirees have already lost.
She explained that annual adjustments are designed to match current inflation rather than compensate for years of rising expenses.
A September survey by AARP found that approximately three-quarters of Americans aged 50 and older believed a projected 3.5% increase would not adequately cover rising costs.
AARP CEO Myechia Minter-Jordan also warned that many older Americans face significant financial challenges. According to the organization, one in five older Americans has no retirement savings.
Another concern involves Medicare premiums, which could reduce the amount retirees actually receive.
Medicare has not yet announced its 2027 Part B premiums. Those premiums are generally deducted directly from monthly Social Security payments.
If premiums rise substantially, retirees could lose part of their COLA increase before receiving their benefits.
Meanwhile, the New York Post reported that Social Security’s Old-Age and Survivors Insurance trust fund faces growing financial pressure.
The fund is projected to exhaust its reserves in 2032. Without congressional intervention, continuing income would cover approximately 78% of scheduled benefits, according to the 2026 Social Security trustees’ report.
Those potential reductions are not part of the newly announced COLA and are not guaranteed.
Beneficiaries with personal my Social Security accounts will be able to view their individual COLA notices online beginning in November, approximately three weeks before receiving mailed notifications.