Social Security beneficiaries will get a 3.6% cost-of-living adjustment for 2027, the Social Security Administration said Wednesday. The benefit boost is based on the increase in the consumer price index from the third quarter of 2025 through the third quarter of 2026, which became clear after the release of Wednesday’s inflation report for September.
The increase translates to an extra $75.15 a month on average, or about $900 a year, for the roughly 72 million people who get Social Security payments and more than 7 million who receive Supplemental Security Income. The average monthly benefit will rise from $2,087.52 to $2,162.67 effective January 1.
The cost-of-living adjustment is 0.8 percentage points above last year’s 2.8% increase and the highest since 2023, after inflation surged.
The latest annual increase drew concern from both senior advocates and budget watchdogs.
The former warned that benefits are failing to keep up with the actual cost of living for many older Americans and that the larger payments will arrive too late to help beneficiaries cope with prices that have already risen.
“When inflation spikes due to a geopolitical event like the Iran war, seniors pay the price,” said Shannon Benton, executive director of The Senior Citizens League. “Prices go up today, but benefits stay the same for months due to an outdated COLA methodology. Working people can request a raise or seek a higher-paying position, but seniors have to make lifestyle cuts or drain their savings until the next COLA.”
On the other hand, budget watchdogs warned that Social Security’s retirement fund is less than six years away from insolvency and that seniors could face a 22% benefit cut in 2032 that would erase years’ worth of annual inflation adjustments.
The libertarian-leaning CATO Institute estimated that the cost-of-living adjustment will add $56 billion to Social Security spending next year and called for a change to the inflation calculation used to determine annual benefit changes. The Committee for a Responsible Federal Budget, which advocates for deficit reduction, also said that the Social Security funding shortfall means that changes should be considered to the cost-of-living adjustments for current beneficiaries in addition to reforms for future beneficiaries.