About 76 million Americans will get a raise in January. The Social Security Administration has announced a 3.6 per cent cost-of-living adjustment for 2027 — the largest since 2023 — lifting the average retired worker’s cheque by about $75 a month, to roughly $2,163. Nearly 72 million Social Security beneficiaries see the increase in January; about 7.3 million people on Supplemental Security Income get theirs on December 31.
The figure, announced October 14 alongside September’s inflation data, reflects the rise in the CPI-W index between the third quarters of 2025 and 2026. It beats the 2.8 per cent COLA for 2026 and the 2.5 per cent for 2025, and it came in nearly a full point above the Social Security Trustees’ own projection — a measure of how fast prices ran this year. The maximum earnings subject to Social Security tax rises to $192,300 in 2027, up from $184,500.
The fine print eats the headline
A 3.6 per cent raise is not a 3.6 per cent raise in the bank. Medicare Part B premiums, tax withholding and other deductions come out first — and the standard Part B premium is projected to rise from $202.90 toward roughly $209.50, shaving about $6 a month off the average gain before anything else. “The headline that seniors are getting the highest COLA since 2022 is a bit misleading,” says independent policy analyst Mary Johnson, who estimates her own monthly spending in 2027 will exceed the COLA by at least $244. “That may get us one fill-up at the gas station,” she said of the roughly $76 most recipients will see.
The cliff behind the raise
The bigger number hangs over the whole exercise. The Trustees project the retirement trust fund runs out in 2032, triggering an automatic 22 per cent benefit cut — a cut one budget watchdog says would wipe out roughly nine years of COLAs at once. Workers within a decade of claiming have the least time to build savings that could absorb it. Practical notes for now: recipients with a my Social Security account can see their COLA notice online starting in late November, up to three weeks before the paper notice — but only if they enrol in paperless notices by November 18. Everyone else gets the simplified one-page notice by mail in December.
