Social Security and SSI benefits will increase 3.6% in 2027 for more than 72 million people, according to the Social Security Administration (SSA) announced Wednesday.
The cost-of-living adjustment (COLA) is the largest since 2023 and means that, on average, retirement benefits will increase by $75 per month, the SSA said.
THE Commission for a Responsible Federal Budget (CRFB) says that equates to about $900 per year and estimates that those with the highest incomes will see an increase of more than $2,200 per year.
The SSA calculates the COLA based on the average year-over-year change in the Urban Wage Earners and Clerical Workers Consumer Price Index (a form of inflation measure) for July, August, and September.
SSI recipients will receive the first higher payment on December 31, 2026. Some people receive both SSI and Social Security. Most Social Security recipients will receive the higher amount starting January 1, 2027.
The COLA will also affect Medicare Part B beneficiaries, whose premiums are deducted from their Social Security payments. The standard premium for 2027 is expected to increase from $202.90 to $209.50, an increase of $6.60 per month, which would leave the average retired worker about $68 per month better off after COLA.
“Next year’s COLA can’t come soon enough”
SSA Commissioner Frank J. Bisignano said the adjustment would provide beneficiaries “greater financial stability” and reflects a year of high inflation, particularly in gasoline and energy prices.
But Nancy Altman, president of the advocacy group Social Security Works, said the increase “does not fully account for the costs faced by Social Security recipients.”
Altman said that’s because the CPI-W, the inflation index used to calculate Social Security increases, tracks costs for workers, not retirees, who she said spend a higher share of their income on health care and housing.
“Next year’s COLA can’t come soon enough for many Social Security recipients,” she told Yahoo.
The Senior Citizens League (TSCL), a nonpartisan group of seniors, also criticized the increased payments. Executive Director Shannon Benton said in a statement that the COLA “is not meeting expectations” and that benefits are lagging behind the price spike because seniors don’t see the adjustment until January.
This is a concern also shared by the beneficiaries. AARP Analysis released this week, found that 76% of adults 50 and older said a COLA of around 3.5%, slightly lower than the reported figure, would not be enough to help them keep up with rising prices.
Kathleen Romig, director of Social Security and Disability Policy at the Center on Budget and Policy Priorities, said the annual COLA increase is “particularly important during times of high inflation.”
“This year’s COLA is higher than many recent years due to rising prices,” she told Yahoo. “Another 3.6%…will help beneficiaries deal with rising costs at the pump and grocery store.”
“Gasoline and groceries can quickly eat up the COLA, and that’s not counting health care, where costs are expected to increase by an average of 5.4 percent annually over the next decade,” Robert Laura, a retirement transition coach, told Yahoo.
Some political groups say the COLA calculation should be updated to use a measure that better reflects retirees’ spending habits.
The Senior Citizens League wants the COLA for retirees to be calculated based on a measure called the Consumer Price Index for the Elderly (CPI-E).
Introduced by the United States Bureau of Labor Statistics (BLS) in 1987, it uses the same underlying price collection system as the main CPI, but instead calculates the market basket. to reflect how older Americans actually spend their moneytaking an overview of retirees’ spending priorities as well as how much they spend out of pocket.
How can I check if I am eligible for the increase?
You don’t have to do anything. The increase is automatic for anyone receiving Social Security or SSI.
The SSA said enrollees can view their 2027 Medicare Part B premium in their “My Social Security Message Center” starting in late November. Changes to Medicare will be posted on medicare.gov.
Beneficiaries will receive a simplified one-page COLA notice with their new benefit amount, exact dates, and any deductions.
Online: People with a personal Social Security account can view the notice starting in late November, up to three weeks before a notice is mailed. People without an account must create one and sign up for paperless notices by November 18 to view it online. Account holders can also sign up to receive text or email alerts.
By mail: Anyone not registered for electronic notices will receive theirs in December.
For more information, see SSA COLA page.
Key dates
November 18: Deadline to create a my social security account and register for electronic notices to consult the notice online.
Late November: Online COLA notices will be available to paperless account holders, and Medicare enrollees will be able to view their 2027 Part B premium in their message center. The premium is usually deducted directly from monthly Social Security payments.
December: Mailed COLA notices are sent.
From December 31, 2026 to January 2027: Beneficiaries begin receiving payments with the increase added.
SSI payments normally arrive on the first of the month, but the January payment will arrive on December 31, 2026, because January 1 is a federal holiday.
Social Security payments are generally made on the second, third, or fourth Wednesday of the month, depending on the recipient’s birthday.
People who started receiving Social Security before May 1997, or who receive both Social Security and SSI, generally receive their Social Security payment on the third of the month.
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