Social Security benefits to increase in 2027 as inflation persists

Beginning in January 2027, monthly benefit checks will increase by 3.6%. This change will provide an average boost of $75 per month for typical recipients.

The COLA is calculated based on inflation data from July, August, and September of the previous year. The current increase reflects that period’s inflationary pressures.

Bill Sweeney, senior vice president of government affairs at AARP, emphasized the importance of the adjustment, particularly for older retirees. He stated, “For the vast majority of Americans, their Social Security is kind of the only thing in their retirement portfolio that is inflation-adjusted, and so it becomes really important for retirees, especially as they get older.”

Sweeney explained that the COLA helps older individuals maintain their budgets when other income sources may be limited. He noted that it becomes crucial when returning to work is no longer a viable option.

Pension plans were once a significant component of retirement planning for Americans, but their decline has shifted the importance of private savings and Social Security. Sweeney described the current retirement landscape as having only two “legs” of support, a departure from the traditional “three-legged stool” approach.

According to Sweeney, roughly half of retirees depend on Social Security for nearly all of their income, with about 20% relying on it entirely. He highlighted that the COLA can be the difference between affording basic necessities.

The upcoming 2027 COLA represents the largest increase since 2023, when benefits rose by 8.7% due to a surge in inflation. Subsequent years have seen smaller adjustments, with 3.2% in 2024, 2.5% in 2025, and 2.8% in 2026, reflecting the easing of inflationary pressures.