Social Security beneficiaries are on track for their largest cost-of-living increase in four years, potentially pushing the average monthly retirement check above $2,000. But the bigger raise comes with an uncomfortable reality: Americans are getting a larger Social Security boost because inflation is running hotter. The new Social Security cost-of-living adjustment, or COLA, for 2027 is 3.6 percent, up from the 2.8 percent increase beneficiaries received in 2026 and 2.5 percent in 2025.
Bisignano said in a statement. Trump, Social Security is delivering better, faster, higher-quality service for the American people." With the new COLA, the Senior Citizens League estimated that an average monthly Social Security payment of $1,940.08 would increase by more than $67 per month to make the average above $2,000. While millions of retirees will welcome the higher payments, the reason for the increase is less encouraging.
The COLA is determined by inflation. So the higher prices climb, the larger the adjustment generally becomes, meaning the bigger 2027 raise reflects the rising cost of goods and services beneficiaries have already been confronting. After all, they're seeing substantially more money added to their monthly check,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
Its purpose is to help prevent inflation from eroding the purchasing power of existing benefits. The SSA calculates COLAs using the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W, comparing the average for July, August and September with the corresponding previous third-quarter average. Subsequently, a higher COLA signifies that the inflation measure used by Social Security has risen more quickly.
The COLA was 2.5 percent in 2025 and 2.8 percent in 2026. That means the 2027 adjustment will be the largest since 2023. That year beneficiaries received an 8.7 percent adjustment following the inflation surge associated with the pandemic.
With the COLA for 2027 announced at 3.6 percent, the percentage increase will apply to benefits at all different levels. That means people with larger benefits generally receive a larger dollar increase. But because Social Security's adjustment is meant to protect beneficiaries against increases in consumer prices, it therefore generally becomes larger when its measure of inflation rises.
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