Social Security Benefits to Rise 3.6% in 2027, the Largest Increase in Four Years

Tens of millions of retirees, disabled workers and other beneficiaries will receive a 3.6% cost-of-living adjustment next year, the Social Security Administration announced, the biggest annual increase since 2023 and a reflection of the energy-driven surge in consumer prices.

The adjustment works out to about $75 a month for the average retiree, the agency said. It will take effect in January for nearly 72 million Social Security beneficiaries, while about 7.3 million people who receive Supplemental Security Income will see higher payments beginning Dec. 31. In total, roughly 76 million Americans will be affected.

Inflation drives a bigger raise

The 2027 increase compares with 2.8% this year and is in line with projections from Social Security analysts, who had forecast a range of 3.5% to 3.6%. The last larger adjustment came in 2023, when benefits jumped 8.7% during the post-pandemic inflation spike.

The announcement followed Wednesday’s Labor Department report showing consumer prices rose 3.7% over the 12 months through September, pushed higher by gasoline and diesel costs tied to the war with Iran. The COLA is calculated from the third-quarter change in a narrower gauge, the Consumer Price Index for Urban Wage Earners and Clerical Workers, which climbed 3.9% over the past year.

Medicare premiums will eat into gains

Advocates cautioned that the boost may not stretch far. In an AARP survey, 76% of respondents said an increase of about 3.5% would not be enough, and the group notes that roughly 40% of beneficiaries 65 and older rely on Social Security for at least half of their income.

Medicare Part B premiums, often deducted directly from monthly checks, are projected to rise to $209.50 in 2027 from $202.90, according to the Medicare trustees, trimming the net increase for many retirees.

When beneficiaries will see the change

People with a personal my Social Security account can view their COLA notice online starting in late November; those who want to see it digitally must sign up for paperless notices by Nov. 18. Others will receive a simplified, one-page notice by mail in December listing their new benefit amount and any deductions.

“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.