Retired Americans will see a $75 boost in monthly cheques as benefits rise amid widespread inflation challenges.
United States Social Security benefits will increase by 3.6 percent beginning in 2027, marking one of the largest cost-of-living adjustments (COLAs) of the decade.
On Wednesday, the Social Security Administration announced the hike after the Bureau of Labor Statistics published the Consumer Price Index for September. The alteration represents a four-year high, boosting average monthly cheques by $75 for older adults and people with disabilities.
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The benefit bump will roll out in January for 72 million Social Security recipients, and on December 31, for nearly 73 million Supplemental Security Income (SSI) beneficiaries.
Starting in 2027, the maximum limit for a taxable wage base, or income cap, is slated to increase to $192,300, up from $184,500 in 2026.
The social security programme is the largest federal social insurance framework in the country. The entitlement programme provides financial support for older adults and disabled people, as well as benefits for survivors of families of workers who have passed away. Funded through dedicated payroll taxes, it serves primarily as a federal pension system that replaces a portion of an individual’s pre-retirement income upon leaving the workforce.
The agency bases the annual increase, closely watched by retirees and others receiving benefits, on the average of the annual increase in the CPI for urban wage earners and clerical workers, also known as the CPI-W index. That index rose 3.9 percent in September and averaged about 3.6 percent for the three months of July, August and September. For 2026, the increase was 2.8 percent.
The announcement comes as high US inflation continues to remain a persistent economic headwind, fuelled primarily by energy shocks from the ongoing wars in Ukraine and Iran, which have caused global energy market turmoil that has sent crude oil prices above $100 a barrel.
More recently, refined petroleum products like diesel fuel have climbed to record highs and have contributed to a widening of inflationary pressures.
Most older adults in the US believe the COLA isn’t adequately keeping up with inflation, according to an AARP poll from September. That poll found that about three-quarters of those 50 or older disagreed with the idea that a 3.5 percent COLA in 2027 would be enough to keep up with rising prices.