Social Security announces 3.6% cost-of-living increase for 2027

The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027 in the United States on Wednesday, October 14, 2026. More than 75 million Americans are due an increase next year, according to CBS News, which described it as the largest annual boost in four years. The adjustment follows a 2.8% increase for 2026, Business Insider reported. For people who rely on Social Security to meet regular expenses, the size of the increase matters alongside the prices they will face when it arrives.

AARP calculates that the 3.6% adjustment would add about $900 over a year, or an average of $75 a month, according to Business Insider. Those figures describe an estimated average, rather than the increase on every recipient’s check. Business Insider says the agency will begin notifying people of their individual benefit amounts through its online portal in November. The available reporting does not establish the exact date when adjusted payments will begin.

How the 2027 Social Security increase is calculated

The annual adjustment is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. CBS News says the calculation uses inflation data from July through September; Business Insider describes it as comparing third-quarter price increases with the same period a year earlier. The announcement followed Wednesday’s September inflation report. The Labor Department said consumer prices rose at an annual rate of 3.7% in September, according to CBS, which linked some of this year’s higher inflation to soaring fuel prices associated with the war in Iran.

Shannon Benton, executive director of the Senior Citizens League, told CBS that cost-of-living adjustments are meant to keep pace with inflation, rather than restore purchasing power lost in earlier years. She said a larger check would go toward bills that had also grown. That distinction helps explain why a higher percentage increase can coexist with concern about household finances: the adjustment responds to measured price changes, while recipients still have to pay their current costs from their total income.

Why advocates question the inflation formula

An AARP survey conducted before the announcement found that about three-quarters of older Americans thought a 3.5% adjustment would be insufficient to keep up with rising prices, CBS reported. That was respondents’ assessment of a proposed-sized increase, not a measure of how the newly announced 3.6% adjustment will affect each household. In a Wednesday statement cited by CBS, AARP chief executive Myechia Minter-Jordan said one in five older Americans had no retirement savings and that more people felt financially insecure than a year earlier. She said older Americans could not afford benefit cuts.

The benefits at stake for older Americans

Social Security is the largest antipoverty program in the United States, according to the Census Bureau as cited by CBS. CBS reported that the senior poverty rate rose from 14.2% in 2022 to 15.4% in 2025. Business Insider, also citing the Census Bureau, reported that Social Security kept nearly 21 million older Americans out of poverty. Those figures show why changes in benefits have consequences beyond the percentage announced for any single year: many recipients depend on the program for basic needs.

Business Insider reported that an August AARP survey covered 1,085 Americans aged 50 and older. Just over half of respondents who received Social Security said it was their main income source. Among those highly reliant on it, 82% said the benefit helped pay for basics including housing, food and healthcare. The survey findings describe respondents’ circumstances; they do not establish that every beneficiary faces the same costs or receives the same dollar increase.

A longer-term funding problem also hangs over the program. CBS reported that Social Security’s trust fund is projected to become insolvent in six years and that, without congressional action, recipients would face benefit cuts of more than 20% in 2032. Business Insider reported the trustees’ latest accounting as finding that the Old-Age and Survivors Insurance Fund would stop paying full benefits at the end of 2032 unless funding is replenished. The 2027 adjustment sets next year’s increase; the 2032 projection concerns the program’s ability to pay full benefits later.