2027 Social Security Benefits: A 3.6 Percent COLA Increase

Takeaways

• Social Security and SSI benefits will increase by 3.6 percent in 2027, up from 2.8 percent this year.

• Social Security recipients can expect the increase in January. SSI recipients will see theirs December 31.

• The COLA increase may not match the inflation older adults actually face, since health care and long-term care costs often rise quickly.

On October 14, 2026, the Social Security Administration (SSA) announced a 3.6 percent cost-of-living adjustment (COLA) in 2027. It applies to both Supplemental Security Income (SSI) and Social Security recipients. This includes retirees, their spouses and survivors, as well as those who receive disability benefits.

COLA is a yearly increase to Social Security benefits meant to help payments keep up with rising prices. Without it, the same monthly check would buy less and less over time as the cost of groceries, rent, and medical care goes up. The increase amount corresponds to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This government measure tracks how much prices change for a typical basket of goods and services.

The SSA compares average CPI-W readings from the third quarter of one year to the same period the year before. If prices have gone up, benefits rise by the same percentage. However, if prices don’t rise from one year to the next, there is no increase. When that happens, the monthly payment remains the same.

The SSA announces it each fall so it takes effect in January. Nearly 72 million Social Security beneficiaries will see the increase in January 2027. Approximately 7.3 million SSI recipients will begin receiving the higher payments on December 31, 2026.

The 3.6 percent COLA increase is the biggest increase since 2023. This will translate to a monthly payment increase of about $75 for the average retired worker.

What this Means for Beneficiaries

If you currently receive Social Security or SSI benefits, your 2027 benefit will reflect the 3.6 percent increase. However, the amount you receive may be lower if other changes or deductions apply. 

Some people receive both SSI and Social Security benefits. The COLA applies to both, so beneficiaries may see an increase in each payment. However, the raise may not appear as a full 3.6 percent on each check.

The SSA counts Social Security benefits as income when calculating how much SSI someone gets. When your Social Security payment rises, your SSI payment can decrease slightly. Your total monthly income still goes up, but the split between the two payments may look different from what you expect.

Information about the new benefit amounts will begin arriving in the mail in early December. Those with a my Social Security account can view their notice online. The notice will include the recipient's new social security payment amount, any deductions, and relevant dates.

Social Security is a primary source of income for many retirees. For a large share, it is the largest part of their budget. A 3.6 percent raise means a bigger monthly check without any action on the recipient's part. The added cushion can make it easier to keep up with rising prices and avoid dipping into savings.

Seniors enrolled in Medicare usually have their Part B premium taken directly from their Social Security payment. The 2027 premium has not been announced yet. When it is, any increase will affect the COLA available for seniors to take home.

For example, imagine a retiree who receives $2,000 a month. A 3.6 percent COLA adds $72, bringing the benefit to $2,072. If the Part B premium rises by $15 a month, the difference is deducted from the total. This reduces the net increase from $72 to $57.

The retiree still comes out ahead, but the raise is about 20 percent smaller than the headline number suggests.

Context and Outlook

This 3.6 percent cost-of-living adjustment is a notable increase from last year’s adjustment of 2.8 percent. Over the past decade, the average COLA has been about 3.1 percent. That puts this year’s raise above the recent norm.

Although COLA is designed to offset inflation, it may not be enough to keep up with rising housing, health care, or other costs. The CPI-W takes account of inflation in sectors not relevant to many older Americans' typical expenses. For example, most younger Americans don't have the same health or long-term care costs which increase at a higher rate than others. As such, the CPI-W may not accurately reflect the older population's needs.

Summary and Additional Reading

Social Security and SSI recipients are getting a raise next year. The 3.6 percent boost, confirmed by the SSA on October 14, tops the typical yearly increase of the past decade. It affects roughly 76 million people across Social Security and SSI, including retirees, survivors, and people with disabilities.

The adjustment exists to protect purchasing power, so a fixed monthly check doesn’t lose value as prices climb. For many households living on limited income, that cushion matters. Still, the number may fall short of supporting retirees amid rapidly increasing home and health costs every year.

Its value to each person will depend on their own expenses, so it’s worth reviewing your notice when it arrives in December.

For additional reading on topics related to Social Security benefits, check out the following articles:

• Could the Trump Administration Privatize Social Security?

• Does Divorce Affect Social Security Spousal Benefits?

• 10 Ways to Maximize Your Social Security Retirement Benefits

• Are Social Security Benefits Taxed?