Social Security Sets 2027 COLA at 3.6%, Adding About 5 a Month

Social Security Sets 2027 COLA at 3.6%, Adding About $75 a Month

Biggest Raise Since 2023, Starting With January Checks

The Social Security Administration said Wednesday that the 2027 cost-of-living adjustment will be 3.6%, up from 2.8% for 2026 and the largest increase since 2023. It also tops the roughly 2.6% average COLA of the past two decades. The higher payments apply to benefits paid for January 2027 and cover both Old-Age, Survivors, and Disability Insurance and Supplemental Security Income.

Commissioner Puts the Reach at 76 Million Americans

"Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability," Commissioner Frank Bisignano said in a statement. By the agency's count, about 72 million Social Security beneficiaries receive the 3.6% COLA, while roughly 7.3 million SSI recipients begin getting higher payments on Dec. 31, 2026.

Gasoline and an Oil Shock Drove the Number

By law the COLA comes from the Consumer Price Index for Urban Wage Earners and Clerical Workers, averaging July, August and September and comparing the result with the same three months a year earlier. The Bureau of Labor Statistics reported the same morning that headline CPI ran 3.7% for the 12 months through September, up from 3.4% in August, with gasoline up 9.1% in a single month. The Senior Citizens League noted crude averaged $64.50 a barrel in January before the war in Iran pushed it to a peak of $108.64 in May — a run-up that lifted the final figure above the 2.8% the group had forecast early in the year, and 0.9 percentage points above Social Security's trustees' latest projection.

The Typical Retired Worker Gains $75 a Month

According to SSA's 2027 fact sheet, retirement benefits rise about $75 a month on average, or roughly $900 a year, with the average payment climbing from $2,095 to $2,170. The Senior Citizens League puts the average check at $2,162.67, up from $2,087.52. Beneficiaries can multiply their current monthly benefit by 0.036 to estimate their own increase.

Medicare Takes $6.60 of It First

Most retirees on Medicare have the Part B premium withheld straight from their Social Security payment. The 2026 Medicare trustees report projects the standard Part B premium rising to $209.50 a month from $202.90 — an extra $6.60 — while the standard Part D deductible has been set at $700, up from $615, a 13.8% jump. One outside estimate figures a $71.16 raise nets about $64.56 for those paying the standard premium.

The Payroll Tax Cap Climbs to $192,300

Alongside the COLA, the maximum amount of earnings subject to the Social Security tax rises to $192,300 in 2027 from $184,500, a $7,800 increase. The maximum Social Security portion of the payroll tax — paid separately by each employee and employer — is $11,922.60. The earnings test for workers below full retirement age rises to $25,560 a year, or $2,130 a month, with $1 withheld for every $2 above the limit; in the year a worker reaches full retirement age the limit is $67,920 with $1 withheld per $3. Federal SSI payments rise to $1,029 a month for an individual and $1,544 for a couple, and the maximum benefit at full retirement age moves to $4,188 a month.

Advocates Say the Raise Still Falls Short

An AARP survey of 1,023 adults aged 50 and older, fielded Sept. 17–21, found 76% said a 3.5% COLA would not be enough to keep pace with prices. The Senior Citizens League's executive director, Shannon Benton, called it "another year, another COLA that falls short of expectations," noting that seniors do not see the money until January while prices rise immediately. The Committee for a Responsible Federal Budget urged Congress to consider the chained CPI or capping adjusted benefits, estimating the 2027 COLA lifts payments for the "very richest" beneficiaries by more than $2,200 a year.

Notices Online in Late November, Money in Mid-January

Beneficiaries with a personal my Social Security account can view their COLA notice online beginning in late November, up to three weeks before paper notices arrive; anyone wanting paperless notice must opt in by Nov. 18. Because Jan. 1 is a federal holiday and Jan. 3 is a Sunday, some payments go out Dec. 31, and most retirees will see the increase in payments dated Jan. 13, Jan. 20 or Jan. 27.

The Trust Fund Clock Still Points to 2032

The latest trustees report projects Social Security's main trust fund will be depleted in 2032, at which point the program could pay only about 78% of scheduled benefits — an estimated 22% cut. Merging the funds, which would require legislation, moves the date to 2034 with a 17% shortfall. Bisignano told CNBC this week that the program will "be around for another 90 years."