US Social Security benefits will rise 3.6% beginning in 2027, one of the largest cost-of-living adjustments (COLA) in a decade, the Social Security Administration announced Wednesday after the Bureau of Labor Statistics released the September consumer price index.
The increase is the highest in four years, adding $75 to the average monthly payment for seniors and people with disabilities. The bump will apply from January 2027 for 72 million Social Security recipients, and from December 31 for nearly 73 million Supplemental Security Income (SSI) beneficiaries.
Also starting in 2027, the taxable maximum for Social Security income is projected to rise to $192,300, up from $184,500 in 2026.
Social Security is the largest federal social insurance program in the United States, providing financial support to the elderly and disabled, along with benefits for survivors of deceased workers. The program is funded by payroll taxes and operates largely as a federal pension system, replacing a portion of each individual's pre-retirement income.
The agency calculates the annual increase based on the average rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). That index rose 3.9% in September and averaged about 3.6% across July, August and September. In 2026, the increase was 2.8%.
The announcement comes as high US inflation continues to be a persistent economic drag, driven largely by energy shocks from the ongoing conflicts in Ukraine and Iran, which have roiled global energy markets and pushed crude oil above $100 a barrel. More recently, refined products such as diesel have climbed to record highs, adding to inflationary pressure.
According to a September survey by AARP, most older Americans believe the COLA does not keep pace with inflation. About three-quarters of those aged 50 and over surveyed disagreed with the view that a 3.5% COLA in 2027 would be enough to keep up with rising prices.
