Social Security Beneficiaries Will Get the Biggest COLA Boost in Years

1Credit: Michael Siluk / UCG / Universal Images Group via Getty ImagesLearn the 2027 Social Security cost-of-living adjustment (COLA), its impact on benefits, and how it may keep pace with retirees’ rising costs of living.KEY TAKEAWAYSThe 3.6% cost-of-living adjustment for 2027 will provide Social Security beneficiaries with the largest benefit increase since 2023.

The COLA is based on inflation in the third quarter of each year, but advocates say the increase may not keep pace with the rising costs faced by older Americans.

The cost-of-living adjustment (COLA) for 2027 Social Security benefits will be the biggest boost in four years.

Each year, the Social Security Administration adjusts benefits to keep up with inflation. The COLA for 2027 benefits will be 3.6%, the Social Security Administration said Wednesday. That will boost the average retired worker’s monthly check by about $75 (or $900 for the year). That is nearly a 0.8 percentage-point increase from the 2026 COLA and the largest jump since 2023.

Nearly 72 million Americans receive Social Security benefits. Beneficiaries, especially retirees who typically rely on a fixed income, need to know their benefit amount for the upcoming year to plan their budgets and ensure their benefits keep up with rising costs.

The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The SSA compares the CPI-W for the third quarter (July through September) of the current year to the previous year to determine how benefits will increase.

Earlier this year, estimates for the 2027 COLA ran higher than the 3.6% the SSA announced Wednesday, as inflation flared following the start of the war in Iran and a spike in gas prices. Inflation has cooled somewhat since the spring, though it remains above last year’s pace.

Social Security beneficiaries and advocates say they are worried the COLA will not be enough to cover the rising costs of living for older adults, since the COLA calculation only covers a portion of the year.

In an AARP poll taken before the announcement, more than three-quarters of respondents said the projected increase wouldn’t be enough.

Want to see how this announcement will impact your Social Security benefits? Try out Investopedia’s calculator to see how the COLA will boost your 2027 payments by month and across the year.

Many Social Security beneficiaries also say the COLA boost has not kept up with inflation over the years, and in recent months, beneficiaries have told Investopedia that they are tapping their retirement savings or returning to work to cover what Social Security doesn’t.

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