- Social Security and Supplemental Security Income benefits will increase 3.6% in 2027, with average retirement payments rising approximately $75 per month beginning in January.
- The maximum earnings subject to Social Security tax will increase from $184,500 to $192,300, while earnings limits for beneficiaries working before full retirement age will also rise.
- Nearly 72 mn Social Security beneficiaries will receive higher payments in January 2027, while approximately 7.3 mn SSI recipients will see their increases beginning December 31, 2026.
Social Security benefits for approximately 76 mn Americans will increase by 3.6% in 2027, providing an average monthly increase of about $75 for retirees as the federal government adjusts payments to account for inflation.
The Social Security Administration (SSA) announced the annual cost-of-living adjustment (COLA) on October 14, 2026. The increase will take effect in January 2027 for nearly 72 mn Social Security beneficiaries, while approximately 7.3 mn Supplemental Security Income (SSI) recipients will begin receiving higher payments on December 31, 2026.
Some Americans receive both Social Security and SSI benefits, meaning the two groups overlap.
The 3.6% adjustment is intended to help beneficiaries maintain their purchasing power as consumer prices increase, although it falls slightly below the recent pace of inflation.
For retirees who depend on Social Security as a significant source of household income, the adjustment will provide additional monthly payments to help offset rising living expenses. The actual dollar increase will vary according to each beneficiary’s existing payment amount.
The annual COLA is determined by changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by the US Department of Labor’s Bureau of Labor Statistics.
Under the Social Security Act, the adjustment reflects the percentage increase in the CPI-W between the third quarter of the last year for which a COLA was determined and the third quarter of the current year.
If the index does not increase during the relevant comparison period, Social Security benefits do not receive a cost-of-living increase.
The system is intended to prevent inflation from eroding the value of Social Security and SSI payments over time.
The 2027 adjustment also includes changes to the amount of earnings subject to Social Security payroll taxes and the income thresholds that apply to beneficiaries who continue working before reaching full retirement age.
The maximum amount of annual earnings subject to Social Security tax will increase to $192,300 in 2027, compared with $184,500 in 2026. The change raises the taxable earnings ceiling by $7,800.
Workers earning above the new threshold will not pay Social Security payroll tax on earnings exceeding $192,300, although earnings below that amount remain subject to the applicable tax.
Social Security’s retirement earnings test limits will also increase in 2027.
For beneficiaries who have not reached full retirement age during the year, the annual earnings limit will rise to $25,560. Social Security will deduct $1 from benefits for every $2 earned above that threshold.
A different limit applies to people reaching full retirement age during 2027. For those beneficiaries, the earnings threshold will increase to $67,920.
Under that rule, Social Security deducts $1 in benefits for every $3 earned above the threshold until the month before the beneficiary reaches full retirement age.
Once an individual reaches full retirement age, the retirement earnings test no longer applies. Workers who are at or above full retirement age throughout 2027 will face no earnings limit under these rules.
The SSA will begin making personalized COLA notices available online in late November 2026 through the Message Center of beneficiaries’ my Social Security accounts.
These notices will show how the 3.6% adjustment affects individual benefit payments, allowing recipients to review their updated amounts before the increases take effect.
Beneficiaries who want to receive their notices electronically must create a personal my Social Security account by November 18, 2026, if they do not already have one.
Those who enroll in digital notices can access their COLA information as much as three weeks earlier than recipients relying on mailed correspondence.
Account holders can also choose to receive email or text alerts when new messages, including COLA notices, become available in their online Message Center.
Beneficiaries who have not enrolled in paperless notifications will receive notices showing their updated benefit amounts by mail during December.
For Social Security recipients enrolled in Medicare, information about their 2027 Social Security benefit amounts will also become available through their my Social Security Message Center beginning in late November.
Details of Medicare changes for 2027 will be published separately on the Medicare website. Beneficiaries without online Social Security accounts will receive their COLA notifications by mail in December.
The SSA also reminded recipients that changes in personal circumstances can affect benefit eligibility and payment amounts.
Events such as marriage, divorce or the death of a spouse or former spouse may need to be reported. Beneficiaries should also notify the agency if a child or stepchild receiving payments on their earnings record no longer lives with them.
The agency may use computerized record matching and share information with federal, state or local government agencies to determine eligibility for benefits. Federal law permits certain information-matching activities even without an individual’s consent.
Alongside the 2027 benefit announcement, Social Security reiterated that its services are provided free of charge and warned beneficiaries about fraudulent calls, phishing attempts and requests for personal information.
Government agencies and legitimate companies do not require advance fees through wire transfers or gift cards to provide Social Security services.
Beneficiaries are encouraged to protect their account information and avoid suspicious links or attachments that could expose personal data.
Automatic Social Security cost-of-living adjustments have been part of the US retirement benefits system for more than five decades.
Congress established the COLA framework through the Social Security Amendments of 1972, with automatic annual adjustments beginning in 1975.
Before the introduction of automatic increases, Social Security benefits rose only when Congress approved specific legislation authorizing higher payments.
The 1975 reform linked benefit increases to changes in the CPI-W, creating a regular mechanism for adjusting payments in response to inflation.
Between 1975 and 1982, annual COLAs applied to Social Security benefits payable for June, with recipients receiving the adjusted amounts in July.
After 1982, adjustments became effective for benefits payable in December, which beneficiaries receive in January of the following year.
The 2027 increase continues that schedule, with higher Social Security retirement payments beginning in January and SSI increases taking effect on December 31, 2026.
For millions of Americans receiving retirement and other Social Security benefits, the 3.6% adjustment will provide additional income, while the changes to payroll tax ceilings and retirement earnings limits will also affect workers and beneficiaries who remain employed.
