Social Security benefits to rise 3.6% in 2027

The Social Security Administration has announced a 3.6% cost-of-living adjustment (COLA) for 2027, which is expected to affect approximately 72 to 76 million Americans. Starting in January 2027, the increase is projected to raise the average monthly retirement benefit from $2,095 to $2,170, an addition of roughly $75 per month. This represents the largest increase since 2023.

The adjustment also applies to Civil Service Retirement System (CSRS) annuitants, military retirees, and disabled veterans. However, Federal Employees Retirement System (FERS) retirees will receive a lower increase of 2.6%. This discrepancy is due to a formula rule stating that when the annual adjustment exceeds 3%, eligible FERS basic annuities receive a rate one percentage point lower than the Social Security adjustment.

Additionally, the maximum annual earnings subject to Social Security tax will rise from $184,500 in 2026 to $192,300 in 2027. While the increase aims to keep pace with inflation, some advocacy groups, such as AARP, note that many retirees believe a higher adjustment of 5% to 8% would be necessary to adequately cover rising costs for essentials like housing, food, and utilities.