On October 14, 2026, the Social Security Administration (SSA) announced a 2027 Social Security 3.6 percent cost-of-living adjustment (COLA). It applies to both Supplemental Security Income (SSI) and Social Security recipients. This includes retirees, their spouses and survivors, as well as those who receive disability benefits.
COLA is a yearly increase to Social Security benefits meant to help payments keep up with rising prices. Without it, the same monthly check would buy less and less over time as the cost of groceries, rent, and medical care goes up. The increase amount corresponds to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This government measure tracks how much prices change for a typical basket of goods and services.
The SSA compares average CPI-W readings from the third quarter of one year to the same period the year before. If prices have gone up, benefits rise by the same percentage. However, if prices don’t rise from one year to the next, there is no increase. When that happens, the monthly payment remains the same.
The SSA announces it each fall so it takes effect in January. Nearly 72 million Social Security beneficiaries will see the increase in January 2027. Approximately 7.3 million SSI recipients will begin receiving the higher payments on December 31, 2026.
The 3.6 percent COLA increase is the biggest increase since 2023. This will translate to a monthly payment increase of about $75 for the average retired worker.
What this Means for Beneficiaries
If you currently receive Social Security or SSI benefits, your 2027 Social Security benefit will reflect the 3.6 percent increase. However, the amount you receive may be lower if other changes or deductions apply.
Some people receive both SSI and Social Security benefits. The COLA applies to both, so beneficiaries may see an increase in each payment. However, the raise may not appear as a full 3.6 percent on each check.
The SSA counts Social Security benefits as income when calculating how much SSI someone gets. When your Social Security payment rises, your SSI payment can decrease slightly. Your total monthly income still goes up, but the split between the two payments may look different from what you expect.
Information about the new benefit amounts will begin arriving in the mail in early December. Those with a my Social Security account can view their notice online. The notice will include the recipient’s new social security payment amount, any deductions, and relevant dates.
Social Security is a primary source of income for many retirees. For a large share, it is the largest part of their budget. A 3.6 percent raise means a bigger monthly check without any action on the recipient’s part. The added cushion can make it easier to keep up with rising prices and avoid dipping into savings.
Seniors enrolled in Medicare usually have their Part B premium taken directly from their Social Security payment. The 2027 premium has not been announced yet. When it is, any increase will affect the COLA available for seniors to take home.
For example, imagine a retiree who receives $2,000 a month. A 3.6 percent COLA adds $72, bringing the benefit to $2,072. If the Part B premium rises by $15 a month, the difference is deducted from the total. This reduces the net increase from $72 to $57.
The retiree still comes out ahead, but the raise is about 20 percent smaller than the headline number suggests.
Context and Outlook
This 3.6 percent cost-of-living adjustment is a notable increase from last year’s adjustment of 2.8 percent. Over the past decade, the average COLA has been about 3.1 percent. That puts this year’s raise above the recent norm.
Although COLA is designed to offset inflation, it may not be enough to keep up with rising housing, health care, or other costs. The CPI-W takes account of inflation in sectors not relevant to many older Americans’ typical expenses. For example, most younger Americans don’t have the same health or long-term care costs which increase at a higher rate than others. As such, the CPI-W may not accurately reflect the older population’s needs.
Impact on Medicaid
Medicaid is a joint federal and state program which can assist those with long-term care expenses. While Medicare provides very limited coverage, Medicaid is much more extensive. However, because of its restrictions, qualifying for Medicaid can be extremely difficult. But paying for home care, assisted living, and nursing home without it could be all but impossible. For those receiving Medicaid home care benefits, changes in income can change how much they have to pay over toward their care or contribute to a pooled income trust. Typically, a Medicaid recipient has to submit a renewal or recertification with the department of social services annually showing any changes in income.
If you have questions or need help with how 2027 Social Security increases or other changes in income can affect your Medicaid benefits, contact the elder law attorneys at Kurre Schneps for a consultation.
