Social Security recipients will get a 3.6% cost-of-living adjustment in 2027, lifting the average retired worker’s monthly benefit by about $75, from $2,095 to $2,170. The Social Security Administration announced the increase on Wednesday, and the higher payments will show up with December benefits paid in January.
The increase is the highest COLA in four years and follows a 2.8% adjustment this year. It reflects inflation readings from the third quarter, when the Consumer Price Index for Urban Wage Earners and Clerical Workers rose 3.9% from a year earlier in September. For many retirees, the extra money will help absorb still-high costs for groceries, utilities, insurance and healthcare.
Michael A. Peterson of the Committee for a Responsible Federal Budget said the adjustment is part of the fiscal pressure facing the country and a reason policymakers need to pursue solutions. His warning lands against a simple arithmetic problem: Social Security is giving beneficiaries more now even as its retirement trust fund moves toward a projected 2032 depletion date.
That gap is what makes the news uneasy. CRFB estimates the 3.6% increase will add about $900 a year to the average retiree’s benefits, while the highest-benefit recipients could see increases above $2,200. But without congressional action, beneficiaries could face an across-the-board cut of 22% in 2032. The standard Medicare Part B premium is also projected to rise by $6.60 a month in 2027, to $209.50, trimming some of the gain.
The question now is not whether checks will rise next year. They will. The issue is whether lawmakers move in time to stop the larger cut that is already built into the program’s future. If they do nothing, the 2027 increase will be remembered as a lift delivered before a much sharper reckoning.
