Millions of Americans receiving Social Security benefits will see their monthly payments rise by 3.6 percent in 2027, following the announcement of the annual cost-of-living adjustment (COLA) today.
The Social Security Administration (SSA) has said average benefits will increase by around $75 per month, though this will vary based on the type of benefit claimed and how much recipients already receive. The average benefit will rise from $2,095 per month to $2,170, though individual payments will vary.
“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability,” Social Security Commissioner Frank J. Bisignano said. “Under President Donald J. Trump, Social Security is delivering better, faster, higher-quality service for the American people."
The adjustment follows a 2.8 percent increase in 2026 and is intended to help protect the purchasing power of Social Security benefits as Americans contend with rising living costs.
More than 70 million people rely on Social Security benefits, with the new COLA impacting all payments starting in 2027.
The COLA is an annual adjustment designed to prevent Social Security benefits from losing purchasing power as prices rise. The adjustment is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in the prices of goods and services purchased by working Americans.
The Social Security Administration (SSA) compares the average CPI-W reading for July, August and September with the corresponding three-month average from the previous year. The percentage increase determines the following year's COLA, rounded to the nearest tenth of a percentage point.
Because the calculation uses third-quarter inflation figures, the adjustment is announced in October, once September's data have been published by the Bureau of Labor Statistics (BLS).
How Much Will Benefits Rise By?
According to the SSA, the 3.6 percent COLA will increase the average monthly benefit for retired workers by approximately $75, from $2,095 to $2,170 in January 2027. For an elderly couple both receiving benefits, the average combined monthly payment will rise by $117, from $3,238 to $3,355.
Disabled workers will receive an average of $59 more in their pockets per month, taking their payments from $1,642 to $1,701, while widows and widowers living alone will see their average benefit increase by $69, from $1,936 to $2,005.
Disabled workers will receive an average of $59 more per month, taking their payments from $1,642 to $1,701, while widows and widowers living alone will see their average benefit increase by $69, from $1,936 to $2,005.
These are averages, and individual benefit payments vary from person to person.
Which Benefits Will Increase?
The adjustment affects all SSA-administered payment programs. These are:
- Social Security retirement benefits: Monthly payments to retired workers, including those who claimed benefits before or after full retirement age.
- Social Security Disability Insurance (SSDI): Benefits paid to eligible workers with qualifying disabilities and certain family members.
- Social Security survivor benefits: Payments to eligible surviving spouses, children and other qualifying family members of deceased workers.
- Social Security spousal and dependent benefits: Payments to qualifying spouses and dependents of eligible workers.
- Supplemental Security Income (SSI): Payments to eligible people with limited income and resources who are aged 65 or older, blind or disabled.
Is The COLA Enough?
U.S. inflation accelerated to 3.7 percent in September, up from 3.4 percent in August, according to the BLS. Consumer prices rose 0.6 percent over the month on a seasonally adjusted basis, driven largely by higher energy costs, with gas prices surging 9.1 percent in September, accounting for more than half of the monthly increase, while overall energy costs climbed 5.2 percent.
The CPI-W rose 3.9 percent over the year and 0.7 percent in September before seasonal adjustment.
The 2027 COLA comes amid widespread concern among older Americans that the annual increase will do little to ease the financial pressures they face, particularly in a year when inflation has been running hot. The year-over-year inflation rate was 3.7 percent through September 2026, still well above the 2 percent Federal Reserve target.
A new nationwide AARP survey, published prior to the COLA announcement, found that 76 percent of adults aged 50 and older believed a projected 3.5 percent COLA would be insufficient to keep up with rising prices. Among current Social Security recipients, that figure increased to 80 percent.
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Meanwhile, 71 percent of respondents said an increase of between 5 and 8 percent would be needed to help beneficiaries afford everyday expenses. The poll surveyed 1,023 adults aged 50 and older between September 17 and 21.
The findings were consistent across political affiliations, with similarly large proportions of Republicans, Democrats and independents expressing dissatisfaction with the projected adjustment.
The over 50s advocacy organization has documented similar concerns in previous years, with more than three-quarters of older Americans surveyed in each of the past three years saying the projected increase would be inadequate.
Patrick Sabol, a senior lead planner at investment and financial planning firm Facet, said that while the COLA is certainly helpful, over the years it hasn't "fully kept pace with what retirees are actually spending."
"The adjustments have softened the impact of the rising costs we’re all seeing every day, but they haven’t 100 percent solved for inflationary pressures, so many retirees’ purchasing power has slipped," he told Newsweek. "If retirees don’t have other income to rely on, they will likely have to cut costs somewhere in their budget to stay whole."
Lower income retirees are more likely to continue facing financial strain, even though their benefits have been boosted beyond what they've received in recent years.
"Because the COLA is a percentage increase, retirees who already receive higher benefits will see the biggest raise in dollar terms. But since those retirees often had higher earnings during their careers and, in many cases, saved more in 401(k)s and IRAs, they may not rely on the COLA as much," Sabol said. "Unfortunately, retirees with lower benefits and lower earning histories will see smaller dollar increases, even though they tend to depend on Social Security the most. They’re the ones most likely to keep facing financial strain."
The Committee for a Responsible Federal Budget, a nonpartisan think tank, reports the 3.6 percent increase will boost average benefits "by about $900 per retiree," but that it would "provide an over $2,200 increase for the very richest beneficiaries."
"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 organization said.
Senior advocacy groups have said that while the boost is certainly welcome, it won't soften the blow of heightened inflation for many recipients.
“People are getting crushed by prices," Nancy Altman, president of Social Security Works said following this morning's announcement. "In fact, the All Items Index for the fiscal year ending September 30 is higher than the COLA, at 3.7 percent, a reminder that Social Security beneficiaries are falling behind as their benefits erode as inflation continues to skyrocket. As important as the Social Security COLA is, it is not keeping up with prices.”
The 3.6 percent increase will be reflected in Social Security retirement, disability and survivor benefit payments beginning in January 2027. Recipients of Supplemental Security Income will receive their first increased payment on December 31, 2026, because January 1 is a federal holiday.
The SSA will notify beneficiaries of their new payment amounts in December. Recipients with a personal my Social Security account can also access their COLA notices online.
Contact Newsweek editors on this story: Ben Kelly and Tony Phillips.