Social Security Announces 3.6% Cost-of-Living Increase for 2027

The Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for 2027 on October 14, marking the largest increase since 2023. Driven by accelerating inflation and rising gas prices, the adjustment will provide an average monthly increase of $75 for beneficiaries starting in January 2027. Approximately 7.3 million Supplemental Security Income recipients will see higher payments starting December 31, 2026.

Federal officials attributed the persistent inflation to AI infrastructure costs, the closure of the Strait of Hormuz during the Iran war, and the trade policies of Donald Trump. Alongside the benefit increase, the maximum earnings subject to the Social Security payroll tax will rise to $192,300.

While the administration announced a one-time $90 Part B premium rebate for 21 million traditional Medicare enrollees, some gains may be offset by a projected Medicare Part B premium increase to $209.50. Advocacy groups noted the critical nature of the raise, citing data that one in five older Americans have no retirement savings.