Social Security COLA 2027: Here's how much more money retirees will get next year
The Social Security Administration announced the official annual cost-of-living-adjustment on Wednesday, increasing benefits by 3.6% in 2027.
Tens of millions of retirees will see a modest increase in benefits in January when the new COLA is added to Social Security payments. The 3.6% rise is an additional $75 on average per month, intended to help older adults meet higher prices for food, fuel, and other goods and services.
The agency’s commissioner, Frank Bisignano, said in a statement that the adjustment will give recipients “greater financial stability.” However, some recipients say it’s not enough and won’t offset rising prices.
The Bureau of Labor Statistics’ released September 2026 inflation data showing the consumer price index rose 3.7% last month, a sign that high prices remain an economic challenge for Americans. On a monthly basis, costs jumped 0.6% from August to September, up from 0.4% the previous month.
Lorrie Ufkin, a 71-year-old retiree who lives outside Rochester, Minnesota, said the COLA won’t even put a dent on her healthcare costs, which are set to increase in January after the Trump administration announced it was ending a temporary Medicare Part D subsidy program that has helped offset premiums. Ufkin told The Associated Press that her premiums and drug cost are expected to rise, although the Centers for Medicare & Medicaid Services has projected a modest increase for most people.
The COLA “doesn’t even meet what they’re going to do for changes to Medicare,” she told the AP.
She said one of the medications both she and her husband take will go from $11 per month for each prescription, to $200 per month, after the Republican administration made changes to older Americans’ healthcare programs. She said that was “catastrophic.”
Another change set to take effect next year is an increase in the maximum amount of earnings subject to the Social Security tax. That is slated to increase to $192,300 from $184,500 in 2027, the agency announced.
What is the Social Security COLA for 2027?
Millions of Social Security recipients will get a 3.6% increase in their benefits in 2027. That’s about $75 per month for the average recipient, according to government estimates.
The maximum benefit for a retired worker who claims at full retirement age will go up to $4,188 per month in 2027, up from $4,152 per month in 2026, according to the Social Security Administration. The average benefits for all retired workers will be $2,107 in 2027, up from $2,095 in 2026. A retired couple would see an increase of $147, going from $3,208 to $3,355.
| Estimated Average Monthly Social Security Benefits Payable in January 2027 | ||
|---|---|---|
| Before 3.6% COLA | After 3.6% COLA | |
| All Retired Workers | $2,095 | $2,170 |
| Aged Couple, Both Receiving Benefits | $3,238 | $3,355 |
| Widowed Mother and Two Children | $3,932 | $4,074 |
| Aged Widow(er) Alone | $1,936 | $2,005 |
| Disabled Worker, Spouse and One or More Children | $2,970 | $3,077 |
| All Disabled Workers | $1,642 | $1,701 |
The agency will begin notifying recipients about their new benefit amount by mail starting in early December. Adjusted payments to nearly 7.5 million people receiving Supplemental Security Income will begin on December 31.
Those with my Social Security accounts can view their COLA notices online.
Higher disability benefits threshold
Individuals receiving Social Security Disability Insurance (SSDI) can work while maintaining their benefits, but their earnings must remain below the agency’s limits.
Workers who are not blind may earn up to $1,770 a month in 2027, up from $1,690 in 2026, before their eligibility is affected. For blind workers, the limit will increase to $2,950 per month.
The thresholds for a trial work period — when beneficiaries can test their ability to work while still being considered disabled — will also rise, from $1,210 per month to $1,270.
Is the COLA enough? Some seniors call it ‘a pittance’
For some older adults, the COLA increase in a drop in the bucket as inflation eats away at any gains.
Jaime Jakubczak, a 68-year-old resident of Buffalo, New York who retired early at 55, has recently gone back to work to make ends meet, specifically to afford rising property taxes. He said the COLA is insufficient because it is offset by high inflation and a proposed 3.9% property tax increase in his town.
Jakubczak called the 3.6% cost-of-living adjustment “a pittance,” given how high food, healthcare and gasoline prices have become across the country.
“We were getting ahead a little bit with the COLA based on inflation, but the inflation is so high that it doesn’t offset what our COLA allowance is,” he said.
Most older adults believe the COLA isn’t adequately keeping up with inflation, according to an AARP poll from September. That poll found that about three-quarters of those 50 or older disagreed with the idea that a 3.5% COLA in 2027 would be enough to keep up with rising prices.
Senior advocacy groups say the COLA is a strong reminder of the financial straits of many older people.
“There’s a lot on the line financially right now for older Americans — one in five have no retirement savings, and more people feel financially insecure this year than last. That makes Social Security’s cost-of-living adjustment critically important,” said AARP CEO Dr. Myechia Minter-Jordan.
How does Social Security work?
The Social Security program pays roughly $1.4 trillion in benefits to more than 71 million people each year, including including retirees and low-income individuals with disabilities.
The short answer is that taxes fund Social Security. The government uses taxes from working people to pay benefits to people who have already retired, people who are disabled, the survivors of workers who have died, and dependents of beneficiaries.
Social Security is financed by payroll taxes collected from workers and their employers. While the money is used to pay people currently receiving benefits, any unused money goes to the Social Security trust fund. Some of the money in the trust, together with the Social Security contributions of people in the workforce, pay for future benefits.
To determine what amount of Social Security you’ll receive, the government calculates a percentage of your highest wages from your top 35 years of earning, factoring in when you choose to start receiving benefits.
Why are Social Security benefits adjusted and how is COLA calculated?
Policymakers say the COLA works to preserve the purchasing power of Social Security benefits, and shouldn’t be seen as a pay hike for retirees.
COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The consumer price index, which measures a basket of common products as well as various energy goods, increased 4.3% in August and 3.7% in September.
At one time Congress had to approve inflation increases, but starting in the mid-1970s lawmakers turned that function over to nonpartisan experts within the government bureaucracy. The annual review is now tied to changes in an official measure of inflation and proceeds automatically and with no political brinksmanship
Is the Social Security trust running out of money?
Future problems with the fund have long been predicted, largely because of demographic shifts. As birthrates decline, fewer people become workers, which results in fewer payments of payroll taxes. Meanwhile, more Baby Boomers are retiring and collecting Social Security.
The annual Social Security and Medicare trustees report said the program’s trust fund will be unable to pay full benefits beginning in 2034. If the trust fund is depleted, the government will be able to pay only 81% of scheduled benefits, the report said. So while Social Security won’t go “bankrupt,” a 20% cut in payments would be devastating to recipients, said John Hishta, AARP’s senior vice president for campaigns.
“That’s a car payment, that’s utility costs, that’s monthly grocery bills,” Hishta added.
The Associated Press contributed to this report.