The increase comes as Americans face rising living costs, with annual inflation reaching 3.7% in September. Higher gasoline, housing and healthcare expenses remain concerns for older Americans, many of whom rely on monthly benefits to cover everyday necessities. The new adjustment follows a 2.8% increase in 2026 and reflects changes in consumer prices measured by the federal government.
Millions of Americans Will Receive Higher Social Security Payments in 2027
Nearly 72 million Social Security beneficiaries will begin receiving their increased payments in January 2027. Another 7.3 million people receiving Supplemental Security Income (SSI) will see their adjustments take effect on December 31, 2026. Some Americans qualify for both programs, meaning the two groups overlap.
According to the Social Security Administration, the 3.6% cost-of-living adjustment (COLA) is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. The index is compiled by the Bureau of Labor Statistics and measures changes in consumer prices.
Reuters reported that the CPI-W increased 3.9% in September, while its average annual increase across July, August and September was approximately 3.6%. This three-month period determines the annual adjustment applied to Social Security benefits under federal law.
SSA Commissioner Frank J. Bisignano said the adjustment would provide greater financial stability for approximately 76 million Americans. The agency also announced changes to how beneficiaries will receive information about their updated payments.
Starting in late November, people with personal my Social Security accounts can access their COLA notices online, potentially three weeks before mailed notifications arrive. Those seeking electronic notices must create an account and enroll in paperless communications by November 18.
Beneficiaries who have not selected electronic delivery will receive their notices by mail in December. The simplified, one-page documents will specify individual benefit amounts, payment dates and applicable deductions.
Rising Inflation Raises Questions About Retirees’ Purchasing Power
The benefit increase arrives during another period of accelerating inflation in the United States. Consumer prices rose 3.7% annually in September, compared with 3.4% in August, according to figures reported by Reuters.
Energy costs contributed substantially to the increase. The Guardian reported that gasoline prices climbed 34% over the previous year, accounting for more than half of the overall rise in consumer prices. Fuel oil prices increased 74%, while airfares rose 22.4%.
These increases have intensified concerns about whether annual Social Security adjustments adequately reflect the expenses facing retirees. “Seniors have spent years watching their expenses outpacing their benefits,” Shannon Benton, director of the Senior Citizens League, told NBC News.
Benton acknowledged that the adjustment would offer some financial relief but said it would not reverse the effects of rising expenses over the past decade. Healthcare costs are another consideration. Information about Medicare changes for 2027 will be published through Medicare’s official website, while beneficiaries with online Social Security accounts can view their updated Medicare premiums beginning in late November.
