Social Security's 2027 COLA Set at 3.6%, the Largest Since 2023
The Social Security Administration announced a cost-of-living adjustment (COLA) of 3.6% for 2027, marking one of the highest increases since it became automatic in 1975 and following the record-high 8.7% COLA from 2023. The adjustment is based on changes to the Consumer Price Index for Urban Wage Earners (CPI-W) between the third quarters of consecutive years. This year's CPI-W increased by approximately 3.6%, leading directly to the announced raise. Despite being a significant increase, recipients will not see immediate relief from rising costs like healthcare and groceries until January 2027. The Senior Citizens League estimates that Social Security benefits have lost nearly 14% of their purchasing power over the past decade due in part to inflation outpacing adjustments. While high COLAs reflect higher inflation rates, they do little to offset ongoing financial pressures for retirees. The adjustment is automatic and cannot be reduced even if CPI-W declines; however, no reductions are applied when there's a negative change.
Topics: cost-of-living adjustment (COLA) CPI-W inflation social security