Home · Business · Oct 14 archive

Social Security COLA for 2027 Announced at 3.6%

11:05 AM ETConfirmed

Business Desk

In Short: The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027, benefiting over 75 million Americans.

The Social Security Administration announced Wednesday that the cost-of-living adjustment (COLA) for 2027 will be 3.6%, providing a boost to the monthly benefits of over 75 million Americans.

According to the Social Security Administration, the average Social Security payment will increase by roughly $75, bringing the average monthly benefit to $2,170 starting in January 2027.

CBS News reported that about 7.3 million people who receive Supplemental Security Income will see the new COLA reflected starting on Dec. 31, 2026.

The COLA for 2027 is nearly a 0.8 percentage-point increase from the 2026 COLA and is the largest jump since 2023.

In an AARP survey taken ahead of the COLA announcement, about three-quarters of older Americans said a 3.5% inflation adjustment in their Social Security benefits wouldn't be enough to keep up with rising prices.

Shannon Benton, executive director of the Senior Citizens League, told CBS News, “While a 3.6% COLA is certainly welcome, it wouldn't necessarily restore the purchasing power seniors have already lost.”

Jaime Jakubczak, a 68-year-old resident of Buffalo, New York who retired early at 55, called the 3.6 percent cost-of-living adjustment “a pittance,” given how high food, healthcare, and gasoline prices have become across the country.

The COLA is designed to keep pace with inflation, not make up for years of falling behind, according to Max Richtman, president of the National Committee to Preserve Social Security and Medicare.

The nonpartisan Committee for a Responsible Federal Budget noted that the 3.6% COLA “will boost average benefits by about $900 per retiree but would provide an over $2,200 increase for the very richest beneficiaries.”

Social Security payments have been automatically adjusted for inflation annually since 1975, and the biggest COLA to date came in 1980, when inflation increased payments by 14.3 percent.

The Social Security Administration has only stated that the COLA for 2027 would be announced in October of this year, and the announcement was made as expected.

The Bureau of Labor Statistics released September’s inflation data on Oct. 14, which showed the Consumer Price Index rose 3.7% compared to a year ago, determining the 2027 COLA.

What this adds

Background

What's confirmed

• The COLA for 2027 benefits will be 3.6%, the Social Security Administration said Wednesday.
• Any COLA change could be announced as soon as Wednesday.
• RELATED: Pumpkin spice season is back, but it can cost extra; See how much Following the release of the August CPI-W, the Senior Citizens League predicted that the COLA would be 3.5% next year.
• Automatic annual COLAs have been in place since 1975 and are based on how much prices have risen over the past year.
• Social Security beneficiaries will start getting bigger checks in January 2027 and don’t need to do anything to get the increase.
• "There's a lot on the line financially right now for older Americans: 1 in 5 have no retirement savings, and more people feel financially insecure this year than last," AARP CEO Myechia Minter-Jordan said in a statement on Wednesday.

What's still developing

• SSA data shows that the ratio of covered workers to Social Security beneficiaries has fallen over time from 41.9 in 1945, to 16.5 in 1950, 5.1 in 1960, four in 1965 and dipped below three for the first time in 2010.
• Social Security was created in 1935 and began operations in 1937, but over the ensuing decades it has come under financial pressure amid the changing demographics of the U.S. population.
• Social Security forms an important part of most people's retirement plans, but the program itself does much more than just that.
• A worker typically must earn 40 credits to qualify for Social Security, though if they die or are disabled young, they may qualify with fewer credits.
• Social Security is a government program that collects taxes from working Americans and distributes these funds to qualifying disabled workers, retirees, and their families to help them remain financially secure.
• In a nutshell, Social Security is designed to support disabled and retired workers and their families by providing a guaranteed source of lifetime income for those who meet certain criteria.
• "The bottom line is that seniors aren't getting ahead. They're getting a slightly bigger check to pay bills that have gotten even bigger."
• "Without adopting a more adequate COLA formula, seniors likely will continue to tread water or fall behind rather than 'catch up,'" Richtman said.
• With the insolvency of Social Security’s retirement trust fund just six years away – and with it a deep 22% benefit cut – policymakers should urgently begin the work of enacting trust fund solutions.
• Earlier this year, estimates for the 2027 COLA ran higher than the 3.6% the SSA announced Wednesday, as inflation flared following the start of the war in Iran and a spike in gas prices.
• Get personalized, AI-powered answers built on 27+ years of trusted expertise.
• “This provides a little breathing room but won’t undo the damage of what we’ve seen this decade.” The league found in a survey that 89% of older Americans thought the cost-of-living adjustment that kicked in this year, 2.8%, was inadequate given rising costs in the economy.

Sources

• CBS Newslink
• Committee for a Responsible Federal Budgetlink
• Dallas Newslink
• Fox Businesslink
• Investopedialink
• Livenowfoxlink
• NBC 5 Chicagolink
• Newsnationnowlink
• The Independentlink
• Fox Businesslink
• NBC Newslink
• WarpBeat — background on Social Security COLA for 2027 Announced at 3.6% link
• Profit Dissected — video link