Show summary Hide summary
The Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for 2027, the agency said, a change that will affect monthly benefits paid to retirees, disabled people and Supplemental Security Income recipients. The increase will take effect for benefits paid for the month of January 2027, covering Old-Age, Survivors, and Disability Insurance (OASDI) and SSI, the agency said.
The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the year — July, August and September — and is designed to preserve beneficiaries’ purchasing power when inflation rises, the Social Security Administration said. On average, the 3.6% adjustment will increase Social Security retirement benefits by about $75 per month, the agency added.
How this COLA compares and why it rose
The 2027 increase is the largest since the 8.7% boost in 2023, when inflation surged, and follows smaller adjustments as inflation cooled: 3.2% in 2024, 2.5% in 2025 and 2.8% in 2026. The article reporting the announcement said the larger COLA for 2027 was driven in part by a rise in energy prices this year, which surged following the outbreak of the Iran war and have remained elevated because of disruptions in the oil and gasoline supply chain.
Who is affected and what it means
Commissioner Frank Bisignano said the adjustment will be implemented “for 76 million Americans, giving them greater financial stability.” The nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated the boost would raise average benefits by about $900 per retiree annually, while noting the very highest-earning beneficiaries would see larger dollar increases — more than $2,200 for some, CRFB wrote.
CRFB added that the “highest earning couples who retired this year at their normal retirement age will enjoy a $3,600 combined increase – enough to push their combined benefits above $100,000 annually,” the group wrote.
Reaction from advocates
AARP CEO Myechia Minter-Jordan said in a statement that “there’s a lot on the line financially right now for older Americans: one in five have no retirement savings, and more people feel financially insecure this year than last.” She added that “Social Security’s cost-of-living adjustment (COLA) [is] critically important. It helps millions of Americans keep up with rising costs for groceries, routine bills, healthcare and everyday expenses.”
The agency’s announcement and the reactions from AARP and CRFB underscore the role the annual COLA plays for many households, especially those with limited other retirement savings. The Social Security Administration’s release described the methodological basis for the adjustment and the January 2027 implementation date for affected payments.
