A shopper looks at a beverage display on June 4, 2026 at the Market 32 supermarket in South Burlington, Vermont. Robert Nickelsberg | Getty Images Social Security’s cost-of-living adjustment will be 3.6% in 2027, the Social Security Administration said Wednesday. The cost of living adjustment, or COLA, provides an annual adjustment for inflation to Social Security and Supplemental Security Income, or SSI, benefits. Social Security retirement benefits will increase by $75 per month on average, the agency said. “Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability,” Social Security Commissioner Frank Bisignano said in a statement. About 72 million Social Security beneficiaries will see benefit increases in January, according to the SSA. About 7.3 million SSI recipients will receive higher payments starting Dec. 31, the agency said. The 3.6% COLA for 2027 is in line with projections from Social Security experts, who last month forecast a 3.5% to 3.6% increase. profit increase, the highest in four decades, in response to rising inflation. The 2026 COLA was 2.8%. New government inflation data released Wednesday shows consumer price increases are accelerating. The consumer price index rose 3.7% over the past 12 months as gasoline prices rose. About 40% of Social Security beneficiaries age 65 and older depend on the program for at least half of their income, according to the AARP. A recent AARP survey found that 76% of respondents said a 3.5% COLA would not be enough. Read more CNBC Personal Finance Coverage The Social Security COLA is “critically important” because it helps millions of Americans cover rising everyday costs, including groceries, routine bills and health care, AARP CEO Myechia Minter-Jordan said in a statement. “There is a lot at stake financially right now for older Americans: One in five have no retirement savings, and more people feel more financially insecure this year than last,” Minter-Jordan said. How to Calculate Your 3.6% Benefit Increase Beneficiaries can multiply their current monthly benefit amount by 3.6%, or 0.036, to estimate the increase in their 2027 checks. However, keep in mind that increases in Medicare Part B or Part D premiums for 2027, which can be deducted directly from benefit checks, may affect the size of beneficiaries’ monthly payments. Standard monthly Medicare Part B premiums are projected to be $209.50 in 2027, up from $202.90 in 2026, according to a report from the Medicare trustees. Some beneficiaries may pay additional surcharges, known as income-related monthly adjustment amounts, or IRMAA, if they have higher incomes. Medicare Part B covers preventive and medically necessary services. Meanwhile, Medicare Part D prescription drug plans may see modest premium increases in 2027, according to an analysis by KFF, a nonpartisan health policy research group. The Social Security Administration will send beneficiaries notices about changes to the COLA. The notices will include specific information about your 2027 benefits, including exact payment dates and dollar amounts, as well as any deductions. People who have created My Social Security online accounts can access that information starting in late November, according to the agency. Recipients without an online account who want to view their COLA notice online must create an account and opt-in to receive electronic notices by November 18. Recipients who have not registered to receive online notices will receive COLA statements by mail in December. Those people should make sure the address the agency has on file is up to date, according to the SSA. Medicare premium amounts for 2027 will also be available online through the My Social Security message center starting in late November, the agency said. How the Social Security COLA is Calculated The COLA is based on the percentage increase in a specific government inflation measure: the Consumer Price Index for Urban Wage Earners and White-collar Workers, or CPI-W, from the third quarter of the previous year to the third quarter of the current year. year. The CPI-W is a subset of the consumer price index that tracks the average change in prices of goods and services purchased by urban households. The CPI-W rose 3.9% over the past 12 months, according to September data that the Bureau of Labor Statistics released Wednesday. Policymakers and advocates have proposed alternatives to the CPI-W for calculating the annual COLA. An alternative is the chained CPI, an index that accounts for changes in purchasing habits as prices increase. However, a recent AARP analysis found that switching to that measure “would substantially reduce benefits over time.” Others have proposed using the Consumer Price Index for the Elderly, or CPI-E, an experimental index that tracks spending by people 62 and older. However, some experts say the CPI-E is not necessarily growing much faster than the current measure used to calculate benefit increases. The move to a different COLA measure is one of the changes lawmakers may consider in the upcoming Social Security overhaul. “The future of Social Security is on the ballot this November, and that includes the size of the annual COLA adjustments,” said Nancy Altman, president of Social Security Works, an advocacy group focused on Social Security expansion.
