Social Security gets 3.6% cost-of-living adjustment for 2027
Washington Examiner · RC · trust 67/100
Social Security beneficiaries will receive a 3.6% cost-of-living adjustment in 2027, the Social Security Administration announced Wednesday, as rising prices strain older Americans’ finances .
The increase will raise average monthly retirement benefits by about $75 and apply to nearly 72 million people receiving Social Security benefits beginning in January 2027. Payments for approximately 7.3 million Supplemental Security Income recipients will reflect the adjustment beginning Dec. 31, 2026. Some beneficiaries receive payments through both programs.
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“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability,” Social Security Administration Commissioner Frank Bisignano said.
The adjustment comes as inflation remains elevated. The Bureau of Labor Statistics reported Wednesday that consumer prices rose 3.7% over the 12 months ending in September, up three-tenths of a percentage point from the previous reading. Prices increased 0.6% in September alone, driven in part by a sharp rise in fuel costs.
Meanwhile, inflation remains well above the Federal Reserve’s 2% target, adding to economic pressures facing households ahead of next month’s midterm elections .
Advocates for older Americans say the increase may not be enough to offset those costs. AARP CEO Myechia Minter-Jordan said one in five older Americans has no retirement savings and that more people feel financially insecure this year than last.
“That makes Social Security’s cost-of-living adjustment critically important,” Minter-Jordan said, noting that the annual increase helps beneficiaries afford groceries, health care, routine bills, and other everyday expenses.
AARP polling found that 76% of adults ages 50 and older believe a projected 3.5% cost-of-living adjustment would not keep pace with rising prices, compared with 23% who said it would. The survey’s figures were based on a 3.5% projected adjustment, rather than the 3.6% increase ultimately announced for 2027. AARP found similar concerns in previous years, with 83% expressing skepticism in 2024 and 77% in 2025.
Other research suggests retirees are already cutting back. A survey conducted for the Nationwide Retirement Institute found that 51% of Social Security beneficiaries polled had reduced discretionary spending, while 38% had cut spending on necessities, including groceries and medications.
“People are definitely struggling to meet their retirement needs,” Kevin Jestice, president of Nationwide Retirement Financial Solutions, said.
AARP also warned that reducing the annual adjustment through a different inflation measure could further undermine retirees’ financial security. An analysis released by its Public Policy Institute found that switching to a chained consumer price index, or chained CPI, would gradually reduce benefits over time. For someone claiming Social Security at age 62, benefits could be 3.7% lower at age 75 and 9.2% lower at age 95 under the alternative calculation.
The change would have cost the average male retired worker who retired in 2001 approximately $17,500 over his lifetime and the average female retired worker about $13,400, according to the analysis.
Inflation increased to 3.7% in last consumer price index report before midterm elections
Beyond the immediate cost-of-living adjustment, Social Security faces longer-term financial challenges. The program, created in 1935, has come under pressure as the U.S. population ages and the ratio of workers paying into the system to beneficiaries changes.
The most recent trustees’ report projected that Social Security’s main trust fund would be depleted in 2032. Without congressional action , the program would then be limited to paying benefits from incoming revenue, which the report estimated would cover 78% of scheduled benefits, an effective reduction of 22%.
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