United States Social Security benefits will increase by 3.6 percent from 2027, one of the largest cost-of-living adjustments of the decade. The Social Security Administration announced the hike on Wednesday, after the Bureau of Labor Statistics published the Consumer Price Index for September.
The increase is described as a four-year high and will raise average monthly cheques by $75 for older adults and people with disabilities. It will take effect in January for 72 million Social Security recipients, and on December 31 for nearly 73 million Supplemental Security Income (SSI) beneficiaries.
How the 2027 adjustment is calculated
The agency bases the annual increase on the average change in the CPI for urban wage earners and clerical workers, known as the CPI-W index. That index rose 3.9 percent in September and averaged about 3.6 percent over July, August and September. The increase for 2026 was 2.8 percent.
Starting in 2027, the maximum taxable wage base, or income cap, is set to rise to $192,300, up from $184,500 in 2026.
Inflation pressures and retiree concerns
The announcement comes as high inflation remains a persistent economic headwind. Energy shocks linked to the ongoing wars in Ukraine and Iran have disrupted global energy markets and pushed crude oil prices above $100 a barrel.
Refined petroleum products such as diesel fuel have recently climbed to record highs, adding to inflationary pressures. An AARP poll from September found that most older adults believe the cost-of-living adjustment is not keeping pace with inflation. About three-quarters of respondents aged 50 or older disagreed that a 3.5 percent adjustment in 2027 would be enough to keep up with rising prices.
