Social Security recipients to see 3.6% cost-of-living boost in 2027

The Social Security Administration has projected that the annual cost-of-living adjustment for older adults and people with disabilities will increase by 3.6% beginning in 2027. This adjustment is expected to provide an average of $75 extra per month for the approximately 73 million individuals receiving monthly Social Security benefits and nearly 7.5 million beneficiaries of Supplemental Security Income.

The announcement comes as inflation continues to put pressure on household budgets and as midterm elections approach. The cost-of-living adjustment, or COLA, is financed through payroll taxes collected from workers and their employers. The taxable wage base for these contributions is set to increase to $192,300 in 2027, up from $184,500 in 2026.

Social Security Administration Commissioner Frank Bisignano stated that the adjustment will offer recipients "greater financial stability." However, some older adults have expressed that the increase is insufficient to counteract rising prices.

Inflation has impacted many, with gas prices recently spiking following renewed fighting between the United States and Iran. Lorrie Ufkin, a 71-year-old retiree, noted that the COLA will not adequately cover her expected healthcare costs, which are projected to rise after a temporary Medicare Part D subsidy program concludes at the end of the year. Ufkin anticipates a significant increase in her premiums and drug costs, stating that one of her medications could jump from $11 per month to $200 per month due to changes in healthcare programs.

Senior advocacy groups highlight the financial challenges many older Americans face. "There’s a lot on the line financially right now for older Americans — one in five have no retirement savings, and more people feel financially insecure this year than last," said AARP CEO Dr. Myechia Minter-Jordan. "That makes Social Security’s cost-of-living adjustment critically important."

Jaime Jakubczak, a 68-year-old retiree from Buffalo, New York, who returned to work to manage rising expenses like property taxes, described the 3.6% COLA as "a pittance" given the increased costs of food, healthcare, and gasoline. He added that while the COLA aims to keep pace with inflation, the current rate of inflation negates its benefit.

An AARP poll conducted in September indicated that about three-quarters of individuals aged 50 and older believe that a 3.5% COLA would not be enough to keep up with rising prices.

The Social Security system faces long-term financial challenges. According to the June 2026 Social Security and Medicare trustees’ report, the program's combined trust funds are projected to be unable to pay full benefits beginning in 2034, at which point incoming revenue would cover approximately 83% of scheduled benefits.

Efforts to address the funding shortfall have included proposals such as lifting the Social Security payroll tax cap. Senators Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio) proposed this measure in June, suggesting it would generate substantial revenue and extend the solvency of Social Security for another generation. The Peterson Foundation estimates that lifting the payroll tax cap could add roughly $3 trillion to the program over the next decade.

Both the Trump and Biden administrations have implemented policies that have affected retiree finances and the solvency of the Social Security program. The Trump administration's tax and spending bill included a temporary tax deduction for individuals 65 and over, while the Biden administration repealed two federal policies in 2024 that had previously limited Social Security payouts for a segment of beneficiaries, including former public workers.