Social Security checks will increase by approximately $76 per month for the average retired worker in 2027, as announced by the federal government on October 14, 2026. This increase is due to the Social Security Administration's annual cost-of-living adjustment (COLA), which has been determined each fall for decades. The 2027 increase is 3.6%, based on inflation data, amounting to a little more than $900 for the year.
Bill Sweeney, senior vice president for government affairs at AARP, stated, "The COLA is really one of the only things in most people's retirement portfolios that is inflation-adjusted. That really means that Social Security becomes an increasingly important part of your retirement portfolio as you get older."
Individuals aged 62 or older, as well as those with disabilities or blindness, can receive Social Security benefits. Some dependents or surviving spouses of deceased individuals may also collect payments.
The 3.6% cost-of-living adjustment is the highest since 2023, when payments increased by 8.7% from the prior year's increase of 5.9%. The COLA is calculated using a mathematical formula tied to consumer prices. For over 50 years, Social Security beneficiaries have received annual adjustments to keep pace with inflation. When inflation is low, COLAs are also low; conversely, when inflation spikes, as it has intermittently over the past six years, COLAs can be substantial.
Shai Akabas, vice president for economic policy at the Bipartisan Policy Center, noted that the upcoming adjustment is "not wildly outside of the norm." He explained that since inflation has remained above the Federal Reserve's target of 2% year over year since 2021, COLAs have generally been higher than that.
The Bureau of Labor Statistics calculates the adjustment by determining the percent change between the average consumer price index for workers from July through September of the current year and the same figure from the previous year. If the percent change is negative, there is no adjustment for the following year.
Due to the volatility of inflation across different sectors, predicting the impact of a COLA when it takes effect in January may be challenging, according to Akabas. However, he emphasized that the adjustment is not intended to be a perfect solution. "It's meant to be as close to an approximation and current a measure as can be done," he said, adding that it must be incorporated into millions of benefit payments and communicated throughout the system.
Sweeney remarked that the 3.6% increase is "a significant amount of money," but noted that rising costs can still make it difficult for consumers to keep up. An AARP poll of approximately 1,000 adults aged 50 and older found that 76% of respondents believed a projected increase of 3.5% would not be sufficient to keep pace with rising prices, including 80% of Social Security recipients.
About 70% of older adults indicated that an increase between 5% and 8% would be "sufficient" to help Social Security recipients manage expenses, a figure that has remained relatively consistent over the past three years of AARP's polling.
Mary Johnson, an independent Social Security and Medicare policy analyst who receives benefits, stated that older Americans lose purchasing power over time. This is partly because older adults spend more on healthcare than younger adults, while the COLA is based on the costs of urban wage earners, which does not account for retired individuals. In 2020, people aged 65 and older spent nearly 2.5 times more on healthcare than working-age individuals, according to government data.
Next year's COLA may also be affected by an increase in Medicare Part B premiums, which did not occur when Social Security recipients received a significant COLA in 2023. Akabas mentioned that recent estimates suggest premium increases will likely be less than $20 per month.
The impact of the Social Security payment increase will vary among households, Akabas noted. For instance, gas prices have remained high, meaning the COLA may overcompensate for individuals who use less gas while being insufficient for those who fill up more frequently.
There are also spending nuances within the older population. Johnson tracked her budget in 2025 and 2026 and observed spending increases that exceeded 3.5% in various categories, including medical and dental insurance, electricity, groceries, and property taxes.
There is ongoing debate regarding whether the Social Security Administration should alter its formula for calculating COLAs, but finding a perfect solution may be challenging. Akabas stated, "It's difficult to create one cost-of-living index that applies to everybody in a group as diverse and large as Social Security beneficiaries."