Social Security announces 3.6% COLA for 2027, highest increase in four years

Key Points:

• Social Security benefits will increase by 3.6% in 2027, marking the largest boost in four years and the fifth-largest adjustment in the past 35 years, benefiting nearly 72 million recipients.
• The cost of living adjustment (COLA) will add about $75 per month for the average retired worker and $59 for disability and survivor beneficiaries, starting January 2027, with SSI recipients receiving payments on December 31, 2026.
• This 3.6% increase surpasses last year’s 2.8% rise and exceeds recent projections by the Social Security Trustees, reflecting ongoing inflation pressures measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
• Rising Medicare costs will offset part of the Social Security increase, with projected 2027 Part B premiums rising by $6.60 to $209.50 per month and higher deductibles for Medicare Part B and Part D prescription drug coverage.
• The COLA mechanism, established in 1972 to protect beneficiaries’ purchasing power from inflation, automatically adjusts benefits annually based on inflation data from July to September.