The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027, marking the largest increase in three years. Social Security experts had previously estimated the COLA would range from 3.5% to 3.6% when the formal announcement was made following the release of updated government inflation data.
Despite the above-average adjustment, sentiment among older Americans remains skeptical about adequacy. An AARP survey of over 1,000 adults ages 50 and older found that 76% believe a 3.5% increase would be insufficient to maintain purchasing power. The survey, conducted between mid-September and late September, revealed that seven in ten respondents felt an increase between 5% and 8% would be necessary to keep pace with daily living costs. For context, cost-of-living adjustments have averaged approximately 3.1% over the past decade.
The projected 3.5% adjustment would translate to approximately $67.90 added to the average monthly benefit check, bringing it to around $2,008 from $1,940. However, beneficiaries may see limited gains in actual purchasing power due to concurrent increases in Medicare expenses. Standard monthly premiums for Medicare Part B are projected to rise to $209.50 in 2027 from $202.90 in 2026, with Part D prescription drug plans also anticipated to see modest premium increases.
The government has introduced a one-time $90 payment to eligible Medicare Part B enrollees to help offset premium costs. Social Security Administration Commissioner Frank Bisignano characterized the upcoming COLA announcement as something beneficiaries look forward to and remain grateful for. The official adjustment announcement includes an additional month of inflation data beyond September estimates, meaning the final figure could vary slightly depending on how inflation develops in the interim period.
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