Summary
The Social Security Administration announced a 3.6% increase in benefits for 2027 to help more than 75 million Americans keep up with rising living costs. This adjustment, called the cost-of-living adjustment (COLA), is based on recent inflation data but may not fully cover seniors’ rising expenses, especially healthcare.
Key Facts
- The 3.6% cost-of-living increase will start in January 2027, raising the average monthly Social Security payment by about $75 to $2,170.
- This is the largest annual COLA increase in four years, responding to higher inflation partly due to rising fuel prices linked to the war in Iran.
- Inflation measured by the Consumer Price Index rose 3.7% annually in September.
- About 7.3 million Supplemental Security Income recipients will see the increase starting December 31, 2026.
- Some groups say the current inflation measure (CPI-W) used to calculate COLA does not reflect seniors’ higher healthcare costs.
- Advocates suggest using the Consumer Price Index for the Elderly (CPI-E) to better match seniors’ expenses.
- The poverty rate among seniors rose to 15.4% in 2023 from 14.2% in 2022, influenced by rising healthcare costs and slower benefit growth.
- The Social Security Expansion Act and Social Security 2100 Act propose switching to the CPI-E for future COLA calculations to better support seniors.
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