Social Security Administration Announces 3.6% COLA for 2027

The Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for 2027, which will take effect in January. This increase marks the sixth consecutive year of raises of at least 2.5%, a trend not seen since the period between 1988 and 1997. It stands as the fifth-largest annual raise since 1993.

Economists from the Federal Reserve Bank of New York reported that inflation was driven by two primary policies of President Donald Trump: the reimposition of sweeping global tariffs and energy supply disruptions resulting from the war in Iran and the closure of the Strait of Hormuz. The Federal Reserve Bank of New York specifically noted that tariffs increased goods price inflation by 2.9 percentage points by February 2026, though the Supreme Court of the United States later invalidated the Liberation Day tariffs that same month.

While Medicare Part B premium deductions often reduce the net benefit for retirees, the 2026 Medicare Trustees Report estimates the premium will rise by only 3.25% to $209.50 in 2027. This would mark the first time since 2023 that the COLA exceeds the premium increase.