Why the Large Social Security COLA Increase is Bad News for Americans
Summary
The Social Security cost-of-living adjustment (COLA) for 2027 will increase by 3.6%, the largest raise in four years. This increase will raise the average monthly Social Security payment to over $2,000 but is driven by higher inflation, meaning prices for goods and services are rising.Key Facts
- The 2027 Social Security COLA is 3.6%, up from 2.8% in 2026 and 2.5% in 2025.
- About 76 million Americans will receive this COLA increase.
- The average monthly Social Security benefit will rise from $1,940.08 to over $2,000.
- COLA adjustments are based on inflation, measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
- Higher COLA means inflation is causing prices for everyday items to increase.
- The goal of COLA is to protect retirees’ purchasing power from being reduced by inflation.
- The largest recent COLA was 8.7% in 2023, following spikes in inflation due to the pandemic.
- People with higher Social Security benefits will see larger dollar increases due to the percentage adjustment.
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