By Leada Gore
al.com
(TNS)
Social Security benefits will rise by 3.6% in 2027, the biggest boost in four years, according to the Social Security Administration’s Wednesday announcement.
The cost-of-living adjustment (COLA) will equal an additional $75 a month for the average retired worker and an additional $59 a month for disability and survivor beneficiaries. That figure is 0.8% percentage points higher than last year’s increase of 2.8% and 0.9 percentage points above what Social Security Trustees recently projected, according to the Center for a Responsible Federal Budget.
The increase matches the fifth-largest Social Security cost of living adjustment the last 35 years, topped only by 2023 (8.7%), 5.9% (2022), 5.8% (2009) and 4.1% (2006).
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Nearly 72 million Social Security beneficiaries will see a 3.6% COLA beginning in January 2027. Increased payments to about 7.3 million people receiving SSI will begin on Dec. 31 since the normal payment date—Jan. 1, 2027—is a federal holiday.
The COLA will equal an additional $75 a month for the average retired worker and an additional $59 a month for disability and survivor beneficiaries. That figure is 0.8% percentage points higher than last year’s increase of 2.8% and 0.9 percentage points above what Social Security Trustees recently projected, according to the Committee for a Responsible Federal Budget.
The increase matches the fifth-largest Social Security cost of living adjustment the last 35 years, topped only by 2022 (8.7%), 5.9% (2021), 5.8% (2008) and 4.1% (2005), based on date of announcement. The increases went into effect the following year.
The news comes after the last set of inflation data—September’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—was released. The yearly COLA is determined by comparing the CPI-W for July, August and September to the same period of time last year.
The purpose of the COLA is to ensure the purchasing power of Social Security and Supplemental Security Income (SSI) is not eroded by inflation, which has remained stubbornly high throughout 2026. Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic changes began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
Last month, experts with The Senior Citizens League estimated the COLA would be 3.5%, the highest number since 2023.
Medicare costs
A portion of the Social Security increase will be lost to rising Medicare costs.
The latest Medicare Trustees Report projects the standard Part B premium at $209.50 for 2027, a $6.60 monthly increase from the current $202.90. Part B premiums are deducted directly from Social Security checks, reducing the amount of monthly benefits.
The annual Part B deductible is projected to increase from $283 to about $292.
Costs related to Medicare Part D prescription drug coverage are also expected to increase. Standard deductions are projected to rise to $700, up from $615, with out-of-pocket limits increasing from $2,100 to $2,400.
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