Social Security Confirms 3.6% Cost-of-Living Raise for 76 Million Americans Starting January 2027

Retirees, disabled workers and other Social Security beneficiaries will receive a 3.6% cost-of-living increase in 2027, affecting 76 million Americans. Average retirement benefits will rise by about $75 (£56.56) a month from January.

The Social Security Administration (SSA) announced the adjustment on Wednesday, 14 October. Nearly 72 million Social Security beneficiaries will receive higher payments in January 2027, while increased payments for about 7.3 million Supplemental Security Income (SSI) recipients will begin on 31 December 2026.

When Higher Payments Begin

The two recipient totals overlap because some people receive both Social Security and SSI. They should therefore not be added together to calculate the number of Americans affected.

The $75 monthly increase is an average for Social Security retirement benefits, rather than a fixed amount that every beneficiary will receive. Individual increases will depend on the recipient's benefit amount.

Social Security Commissioner Frank Bisignano said the agency would implement the adjustment for 76 million Americans, 'giving them greater financial stability'.

How To Check Your New Payment

Personal notices showing updated benefit amounts will be available to most beneficiaries through their my Social Security accounts from late November.

People without an account must create one by 18 November to access their COLA notice online. The agency also advised beneficiaries to sign up for digital notices by that date to receive their information up to three weeks earlier than by post.

Account holders can choose to receive text or email alerts when their notice becomes available in the account's Message Center.

Paper notices will be mailed in December to recipients who are not enrolled in paperless notices.

The SSA said information about Medicare changes for 2027 would be published separately on Medicare's website. Medicare premiums, where applicable, will also affect the amount beneficiaries receive after deductions.

How the Cost-Of-Living Adjustment Is Calculated

The annual cost-of-living adjustment, known as COLA, is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), compiled by the Bureau of Labor Statistics.

The calculation compares average CPI-W readings for July, August and September with the corresponding period in the previous year. It is designed to help protect benefits' purchasing power against inflation.

The 2027 adjustment is the largest since 2023, when benefits increased by 8.7%. Subsequent annual increases were 3.2% in 2024, 2.5% in 2025 and 2.8% in 2026.

Separately, the maximum annual earnings subject to Social Security tax will rise from $184,500 (about £139,131) to $192,300 (about £145,013).

Unlike the COLA, this adjustment is based on changes in average wages. It means workers earning above the current limit could have a larger portion of their wages subject to Social Security tax next year.

Survey Finds Concern About Rising Costs

An AARP survey published before the announcement found that 76% of adults aged 50 and over disagreed that a projected 3.5% increase would keep pace with rising prices.

The survey assessed a forecast increase, not the subsequently confirmed 3.6% adjustment.

Disagreement was higher among Social Security recipients, at 80%, compared with 72% of non-recipients. Overall, 71% selected an increase of between 5% and 8% as sufficient to help recipients afford everyday expenses.

The survey involved 1,023 US adults aged 50 and over and was conducted from 17 to 21 September through NORC at the University of Chicago's Foresight 50+ panel.