The 2027 Social Security cost-of-living adjustment (COLA) is 3.6%, which adds about $75 a month to the average retirement benefit from January 2027. It is a catch-up: it restores buying power that rising prices had already taken, rather than adding new spending power. How much of it stays in the monthly payment depends on the 2027 Medicare Part B premium, which has not been announced yet.
The Social Security Administration (SSA) announced the figure on October 14, 2026. Nearly 72 million Social Security beneficiaries receive it, along with about 7.3 million people on Supplemental Security Income (SSI), the federal program that pays monthly benefits to older, blind or disabled people with limited income and resources. The 3.6% is applied to the benefit a person already receives, whatever age they claimed at; the trade-offs behind the claiming age itself are explained in Social Security claiming strategies.
This guide covers how the 3.6% is calculated from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), what it is worth after past inflation, how it compares with earlier years and where Medicare fits in.
Key Takeaways
- The 2027 COLA is 3.6%, about $75 a month on the average retirement benefit, and the largest since 2023, when it was 8.7%.
- It compares the average CPI-W for July to September 2026 with the same quarter of 2025: 328.746 against 317.265, a rise of 3.619%, rounded to 3.6%.
- It catches benefits up with prices that already rose. On an index that starts in 2024, buying power slipped to 95.98 by September 2026; the January 2027 increase lifts it back to 99.44 at September 2026 prices.
- The standard Medicare Part B premium, $202.90 a month in 2026, is deducted from the Social Security payments of most beneficiaries enrolled in Part B. The 2027 premium has not been announced.
- Higher SSI payments begin on December 31, 2026, and higher Social Security benefits in January 2027.
The 2027 COLA at a Glance
The Social Security increase for 2027 rests on two inflation readings and one rounding rule. The table below sets out the headline figures.
| Measure | Value |
|---|---|
| 2027 COLA | 3.6% |
| CPI-W, July to September 2025 average | 317.265 |
| CPI-W, July to September 2026 average | 328.746 |
| CPI-W, 12 months to September 2026 | 3.9% |
| CPI-U, 12 months to September 2026 | 3.7% |
| Average retirement benefit increase (SSA) | about $75 a month |
| People affected (SSA) | about 76 million |
The $75 is a national average across retirement benefits, not any individual's figure; each person's increase is roughly 3.6% of their own benefit. The total of about 76 million is SSA's own count across Social Security and SSI; it is smaller than the two groups added together because some people receive both and are counted once. SSA's 2027 fact sheet also lists the new maximum taxable earnings, earnings-test limits and SSI federal payment standard.
How Is the COLA Calculated? The CPI-W Third-Quarter Rule
The CPI-W is a monthly price index from the U.S. Bureau of Labor Statistics (BLS) for households that get most of their income from clerical or hourly-wage jobs. The COLA is the percentage rise in its third-quarter (Q3) average, covering July, August and September, over the Q3 average of the last year a COLA was determined, rounded to the nearest 0.1%. The formula uses index levels that are not seasonally adjusted. For 2027 it works in three steps:
- Average the third quarter. The CPI-W stood at 327.104 in July 2026, 328.481 in August and 330.654 in September. The average is 328.746.
- Compare with the last COLA quarter. The comparison quarter is Q3 2025, when readings of 316.349, 317.306 and 318.139 averaged 317.265. Dividing 328.746 by 317.265 shows a rise of 3.619%.
- Round to the nearest 0.1%. 3.619% rounds to 3.6%, the figure SSA announced.
The same method reproduces the 2026 COLA: the move from a Q3 2024 average of 308.729 to 317.265 in Q3 2025 is a rise of 2.765%, which rounds to 2.8%.
The COLA is also never negative. If the Q3 average falls, there is no COLA that year, and the next one is measured against the last quarter that produced an adjustment.
Why CPI-W and Not CPI-U?
CPI-U, the Consumer Price Index for All Urban Consumers, is the headline inflation measure. It covers more than 90% of the population, including retirees, the self-employed and the unemployed, while CPI-W covers about 30%. Both use the same prices but weight spending categories differently, because the households behind them spend differently. That is why they can diverge: in the 12 months to September 2026, CPI-W rose 3.9% and CPI-U rose 3.7%.
Federal law ties the COLA to CPI-W, so a switch would take an act of Congress. Because CPI-W is built around working households, it does not aim to represent how retired households spend. BLS also calculates the R-CPI-E, a research index for Americans aged 62 and older that reweights the CPI-U spending categories to match how older households spend, for example giving more weight to health care. BLS publishes it as an experimental series and cautions that conclusions drawn from it are tentative.
What the 3.6% COLA Is Actually Worth After Inflation
A 3.6% increase sounds like extra money. Putting benefits and prices on the same scale shows what it actually does.
Benefits Compared With Prices Since 2024
In the table below, both series start at 100: the 2025 benefit against the average CPI-W for July to September 2024, the quarter that set the 2025 COLA. Each later benefit is the previous one raised by that year's COLA, and each price level is CPI-W relative to the 2024 starting average.
| Comparison point | Benefit index | Price index (CPI-W) |
|---|---|---|
| Start: 2025 benefit vs average prices, July to September 2024 | 100.00 | 100.00 |
| 2026 benefit vs average prices, July to September 2025 | 102.80 | 102.76 |
| 2026 benefit vs December 2025 prices | 102.80 | 102.68 |
| 2026 benefit vs September 2026 prices | 102.80 | 107.10 |
| January 2027 benefit vs average prices, July to September 2026 | 106.50 | 106.48 |
| January 2027 benefit vs September 2026 prices | 106.50 | 107.10 |
Read row by row, the table tells a short story:
- The 2026 COLA matched its own quarter. The 2.8% lifted the benefit to 102.80, against average prices of 102.76 for July to September 2025.
- 2026 started level, then fell behind. At December 2025 prices (102.68) the benefit was slightly ahead. CPI-W then rose 4.3% from December 2025 to September 2026, not seasonally adjusted, while the benefit stayed fixed. At September 2026 prices of 107.10, buying power, measured as the benefit relative to prices, was 95.98: the same check bought about 4% less than at the start.
- The 2027 COLA catches up. The two COLAs compound to 6.5%, lifting the benefit to 106.50, while the July-to-September CPI-W average rose 6.48% from 2024 to 2026. The two lines meet almost exactly: 106.50 against 106.48.
- The latest month sits above the quarter. At September 2026 prices, the January 2027 benefit sits at 99.44, about 0.6% below the start.
Why the COLA Lags Behind Prices
The lag is built into the timing. The COLA is measured on July-to-September prices, paid from January and then fixed for 12 months, so any price rise after the measurement quarter waits for the following year's COLA. When prices rise steadily, buying power drifts down between adjustments and is restored in one step. The COLA restores purchasing power lost to past inflation; it does not add to it. It is a specific case of how inflation erodes purchasing power: a fixed sum buys less as prices rise.
The lag is also the focus of advocacy criticism. The Senior Citizens League, whose executive director is Shannon Benton, argues that the COLA method is outdated because prices rise straight away while benefits stay the same for months, and it has called on Congress to base the COLA on an index for older Americans instead of CPI-W. In its reaction to the announcement, AARP cited a survey of adults aged 50 and older, taken while the projected COLA was 3.5%, in which 76% disagreed that the increase would be enough.
What the Index Cannot Tell You
Three limits apply to the benefit-and-price table. CPI-W is a national average for urban wage earners and clerical workers, not any household's own basket, so a household that spends more than average on rent, health care or food can face a different rate. September 2026 is a single month, not seasonally adjusted, while the other price points are three-month averages. And past inflation does not predict future inflation: the table describes prices up to September 2026 and says nothing about 2027.
Social Security COLA History, 2019-2027
At 3.6%, the 2027 adjustment is the largest since 2023, when the COLA was 8.7%. The table below lists each COLA by the year the higher benefits were paid; the 2027 COLA, for example, was announced in October 2026.
| Year benefits paid | COLA |
|---|---|
| 2019 | 2.8% |
| 2020 | 1.6% |
| 2021 | 1.3% |
| 2022 | 5.9% |
| 2023 | 8.7% |
| 2024 | 3.2% |
| 2025 | 2.5% |
| 2026 | 2.8% |
| 2027 | 3.6% |
The 5.9% and 8.7% adjustments of 2022 and 2023 reflected the price surge measured in the years before, and the smaller figures since then reflected slower price growth. Each COLA measures past prices; none is a signal about the next one.
Medicare Part B Premium 2027: How Much of the Raise Is Left?
Medicare Part B covers doctors' services, outpatient care and many preventive services, and most enrollees pay a monthly premium for it. For most people who receive Social Security, the standard premium is deducted from the payment before it arrives, so a premium increase takes part of the benefit increase.
The 2026 Premium: $202.90 a Month
The standard Part B premium is $202.90 a month in 2026, up from $185.00 in 2025: an increase of $17.90, or about 9.7%, in a year when the COLA was 2.8%. The annual Part B deductible is $283. The Centers for Medicare & Medicaid Services (CMS) announced these figures on November 14, 2025.
What Is Known, and Not Yet Known, About 2027
CMS has not announced the 2027 standard premium or deductible; it usually does so in the fall. Until then, the net effect of the COLA can be described but not calculated. For someone who has the standard premium deducted, the part of the increase that reaches the payment is the COLA increase minus the change in the premium. Every dollar by which the 2027 premium exceeds $202.90 comes out of the COLA increase, within the limit set by the hold-harmless provision.
The Hold-Harmless Provision: Who It Protects
Federal law includes a hold-harmless provision. For most people who have the Part B premium deducted from their Social Security payment, it stops a premium increase from making the payment smaller than it was the year before. It applies only when a person's COLA, in dollars, is too small to cover the dollar increase in the premium; their premium increase is then limited to the size of their COLA increase.
It does not apply to:
- people who pay the income-related monthly adjustment amount (IRMAA), a higher premium charged on higher incomes;
- people whose Part B premium is paid by their state Medicaid program;
- newer enrollees who have not been in Part B long enough to qualify;
- people not yet receiving Social Security benefits;
- other deductions, such as Part D drug plan or Medicare Advantage premiums, which can still change the net payment.
An Average Benefit and the Part B Premium
The table below puts the figures for an average retired worker side by side. It illustrates a national average, not any reader's own benefit.
| Item | Monthly amount |
|---|---|
| Average retired-worker benefit, July 2026 | $2,085.98 |
| 3.6% COLA on that average | +$75.10 |
| July 2026 average raised by 3.6% | $2,161.08 |
| Standard Part B premium, 2025 | $185.00 |
| Standard Part B premium, 2026 | $202.90 |
| Standard Part B premium, 2027 | not yet announced |
The $75.10 is 3.6% of the July 2026 average, in line with the announced average increase of about $75. The premium is not subtracted from the benefit, because what changes the payment is the change in the premium, and the 2027 figure is not yet known. Once CMS publishes it, the arithmetic is one line: $75.10 less the dollar change in the standard premium.
Other Things That Can Take a Share of the COLA
Two other rules can affect how much of a higher benefit is kept.
Benefit Taxation Thresholds
Social Security benefits can become partly taxable when half of the benefits plus other income, including tax-exempt interest, exceeds a base amount: $25,000 for single filers and $32,000 for married couples filing jointly. These base amounts are fixed in the tax code and are not adjusted for inflation, so as COLAs raise benefits, more recipients can cross them. The rules are set out in IRS Publication 915; how they apply to a particular return is a question for the IRS or a tax professional.
IRMAA for Higher Incomes
Beneficiaries with higher incomes pay IRMAA on top of the standard Part B premium. CMS announces the 2027 income brackets and amounts together with the standard premium, and people who pay IRMAA are outside the hold-harmless provision.
Key Dates for the 2027 COLA and Medicare
The higher payments, the notices and the Medicare figures arrive on different dates:
- October 14, 2026: SSA announced the 3.6% COLA for 2027.
- October 15 to December 7, 2026: Medicare open enrollment for 2027 coverage; changes take effect on January 1, 2027, if the plan receives the request by December 7.
- November 18, 2026: deadline for people without a my Social Security account to create one and choose paperless notices in order to see the COLA notice online.
- Late November 2026: COLA notices appear in my Social Security accounts, up to three weeks before the paper version.
- December 2026: paper COLA notices arrive by mail.
- December 31, 2026: higher SSI payments begin.
- January 2027: higher Social Security benefits begin.
- Date not yet set: CMS announces the 2027 Part B standard premium, deductible and income-related amounts; the 2026 figures came on November 14, 2025.
The COLA notice is a one-page document showing the new benefit amount and the deductions taken from it, which makes it the first place a recipient's own figure after Medicare appears. SSA set out the payment timing this way:
"Nearly 72 million Social Security beneficiaries will see a 3.6 percent cost-of-living adjustment (COLA) beginning in January 2027. Increased payments to about 7.3 million people receiving SSI will begin on December 31, 2026.
— Social Security Administration (Press release, October 14, 2026)
For the COLA history in one place, see the Money365.Market COLA Tracker.
Frequently Asked Questions
When will I get the 2027 COLA?
SSI recipients get the higher payment from December 31, 2026, and Social Security beneficiaries from January 2027. The COLA notice, online from late November for account holders and by mail in December, shows the new amount.
Why is the COLA based on CPI-W instead of CPI-U?
Federal law ties the COLA to CPI-W, the index for households that get most of their income from clerical or hourly-wage jobs. CPI-U covers a wider population. Moving to another index, such as one weighted toward older households' spending, would take a change in the law.
Will Medicare take part of the 2027 COLA?
For most people who have the standard Part B premium deducted, any premium increase comes out of the COLA increase. The 2026 premium is $202.90 a month, and the 2027 figure has not been announced. The hold-harmless provision stops a premium increase from shrinking the payment below the previous year's amount for most, but not all, recipients.
Does the COLA keep up with inflation?
Measured the way the formula measures it, it catches up: the 2026 and 2027 COLAs together match the rise in the July-to-September CPI-W average from 2024 to 2026 almost exactly, 106.50 against 106.48 on an index. Between adjustments, buying power drifts down when prices rise; by September 2026 it was about 4% below the start. CPI-W is also a national average, and past inflation does not predict future inflation.
Can the Social Security COLA ever be negative?
No. If the July-to-September CPI-W average falls below the comparison quarter, there is no COLA for that year, and the formula does not reduce benefits.
Putting the 3.6% in Perspective
The 3.6% is the largest COLA since 2023, but its job is to restore buying power rather than add to it. The benefit-and-price table shows the last two COLAs bringing benefits back level with the third-quarter price average they were measured on, after a year in which buying power slipped. The open number is on the Medicare side: until CMS publishes the 2027 Part B premium, the share of the $75 average increase that reaches the payment cannot be known.