More than 75 million Social Security beneficiaries will see a 3.6% increase in their monthly payments starting in 2027 to help keep pace with inflation.

The Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for 2027, the largest annual increase in four years. The adjustment, which takes effect in January, will raise the average monthly Social Security payment by approximately $75. This measure is intended to help beneficiaries, including retirees and people with disabilities, manage rising costs driven by inflation.

Calculation and Inflation Context

The annual COLA is determined using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks price changes for a basket of goods and services from July through September. The 3.6% increase follows a 2.8% adjustment in 2026. While the Labor Department reported that the broader Consumer Price Index rose at an annual rate of 3.7% in September, core inflation—excluding volatile food and energy prices—remains at approximately 2.5%.

Advocacy and Concerns

Advocacy groups, including the Senior Citizens League and Social Security Works, argue that the 3.6% increase may not fully restore the purchasing power lost by seniors due to persistent inflation. Critics note that the current calculation method, based on the CPI-W, may not accurately reflect the specific spending priorities of older adults, such as higher medical, prescription drug, and housing costs. A survey by the Senior Citizens League indicated that 89% of older Americans found the previous 2.8% adjustment inadequate.