Social Security benefits will rise 3.6% in 2027, the largest increase since 2023. The adjustment arrives as new data show consumer prices accelerating, with the consumer price index up 3.7% over 12 months.
The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027 on Wednesday. Retirement benefits will increase by $75 per month on average, the agency said.
The increase is in line with experts' projections, which last month forecast a rise of 3.5% to 3.6%. Around 72 million Social Security recipients will see higher payments in January, while about 7.3 million SSI beneficiaries will receive higher payments starting Dec. 31, according to the agency.
The biggest increase since 2023
The 2027 adjustment is the largest since 2023, when beneficiaries received an 8.7% boost, the highest in four decades. The 2026 adjustment was 2.8%.
Government data released the same day show that the consumer price index rose 3.7% over the past 12 months as gas prices jumped. Rising inflation is what drives the adjustment: the COLA tracks the percentage increase in the CPI-W from the third quarter of the previous year to the third quarter of the current year.
Medicare premium changes can affect monthly payments
Increases to Medicare Part B or Part D premiums may be deducted directly from benefit checks and can affect the size of monthly payments. Standard Part B premiums are projected at $209.50 in 2027, up from $202.90 in 2026, according to a report from Medicare trustees.
AARP CEO Myechia Minter-Jordan said the adjustment is "critically important" because it helps millions of Americans cover rising everyday costs.
The Bureau of Labor Statistics reported that the CPI-W rose 3.9% over the past 12 months. Switching to a different COLA measure is among the changes lawmakers may consider in upcoming Social Security reform.
Source: CNBC
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