- The cost-of-living adjustment, or COLA, provides an annual inflation adjustment to both Social Security and Supplemental Security Income, or SSI, benefits.
- With a 3.6% COLA for 2027, Social Security retirement benefits will go up by $75 per month, on average, the agency said.
- Around 72 million Americans will see the benefit increases in January, according to SSA.
- The 3.6% COLA for 2027 is the largest increase to benefits since 2023.
The Social Security cost-of-living adjustment will be 3.6% in 2027, the Social Security Administration said on Wednesday.
The cost-of-living adjustment, or COLA, provides an annual inflation adjustment to both 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.
Around 72 million Social Security recipients will see the benefit increases in January, according to SSA. About 7.3 million SSI beneficiaries will receive higher payments starting Dec. 31, the agency said.
The 3.6% COLA for 2027 is in line with Social Security experts' projections, which last month forecast an increase of 3.5% to 3.6%.
Bigger COLA comes amid higher inflation
The 3.6% COLA for 2027 is the largest increase to benefits since 2023. That year, beneficiaries received an 8.7% benefit boost — the highest in four decades — in response to rising inflation.
The 2026 COLA was 2.8%.
New government inflation data released on Wednesday shows consumer price increases are accelerating. The consumer price index rose 3.7% over the past 12 months, as gas prices jumped.
About 40% of Social Security beneficiaries ages 65 and over rely on the program for at least half of their income, according to the AARP.
A recent AARP survey found 76% of respondents said a 3.5% COLA would not be enough.
- CNBC's No. 1 financial advisor takes a family-office approach
- Trump Accounts hit 70 million enrolled and can now accept stock donations
- Thousands of homeowners face ARM resets — and much higher payments
- Social Security Administration announces 3.6% cost-of-living adjustment for 2027
- CNBC's Financial Advisor 100: Best financial advisors, top firms for 2026 ranked
- CNBC Elite Advisors: Top ultra-high net worth wealth management firms for 2026
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'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," 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 to their checks for 2027.
However, keep in mind that increases to Medicare Part B or Part D premiums for 2027 — which may be deducted directly from benefit checks — can affect the size of beneficiaries' monthly payments.
Standard monthly premiums for Medicare Part B are projected to be $209.50 in 2027, up from $202.90 in 2026, according to a report from Medicare trustees. Some beneficiaries may pay extra surcharges, known as Income-Related Monthly Adjustment Amounts, or IRMAAs, if they have higher incomes. Medicare Part B covers medically necessary and preventive 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 the COLA changes. The notices will include specific information about their 2027 benefits, including exact payment dates and dollar amounts, as well as any deductions.
Individuals who have created online My Social Security accounts can access that information starting in late November, according to the agency. Beneficiaries without an online account who want to see their COLA notice online must create an account and opt into paperless notices by Nov. 18.
Beneficiaries who have not signed up to receive online notices will receive mailed COLA statements in December. Those individuals should make sure the address the agency has on file is up to date, according to 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.
This is a developing story. Please refresh for updates.
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.