Social Security cost-of-living adjustment will rise 3.6% in 2027

Americans collecting Social Security will see a boost in 2027.

Nearly 72 million people will receive a 3.6% cost-of-living adjustment (COLA) increase next year, the Social Security Administration announced on Wednesday.

The COLA’s figures for 2027 were calculated after the U.S. Bureau of Labor Statistics released its September inflation report earlier Wednesday. The Consumer Price Index rose at an annual rate of 3.7% last month.

The Social Security increase is the largest since 2023, according to CBS News.

The new benefits will be paid out beginning in January, the SSA said. Increased payments to approximately 7.3 Supplemental Security Income (SSI) recipients will begin on Dec. 31, 2026.

According to the agency, the maximum amount of earnings subject to the Social Security tax will rise to $192,300. The earnings limit for workers younger than full retirement age will also increase to $25,560. The SSA deducts $1 from benefits for every $2 earned above that amount.

Meanwhile, the earnings limit for people reaching their full retirement age in 2027 will increase to $67,920, the SSA said. The agency said that there will be a $1 deduction for every $3 earned above that threshold.

There is no limit on earnings for workers who have reached full retirement age or older for the entire year.

“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,” AARP Chief Executive Myechia Minter-Jordan told USA Today. “That makes Social Security’s cost-of-living adjustment critically important. It helps millions of Americans keep up with rising costs for groceries, routine bills, health care and other everyday expenses.”

According to the AARP, the average benefit check of $2,087.52 will rise to $2,162.67 each month. That is an increase of $75.15 per month and $901.81 annually, USA Today reported.

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