Business & Finance

Social Security 2027 COLA Set at 3.6%, Adding $75 Monthly, but Many Retirees Say It Won’t Keep Pace with Rising Costs

By Ravi Hari

The Social Security Administration announced that it will apply a 3.6% cost‑of‑living adjustment (COLA) to benefits for older adults and people with disabilities in 2027. The increase is expected to add about $75 a month to the payments of nearly 72 million beneficiaries, including roughly 7.3 million Supplemental Security Income recipients. The projection comes as the U.S. consumer price index rose 3.7% in September, a rise that was partly driven by higher gasoline prices amid renewed tensions between the United States and Iran.

Social Security Administration Commissioner Frank Bisignano said the adjustment would give beneficiaries "greater financial stability." However, advocates for older Americans argue that the increase will not keep pace with the rising costs of food, healthcare, gasoline and housing. Nancy Altman, president of the Social Security Works advocacy group, said the COLA is "not keeping up with prices."

For many retirees on fixed incomes, the projected increase comes amid mounting healthcare expenses. Lorrie Ufkin, a 71‑year‑old retiree living outside Rochester, Minnesota, said the COLA would not offset her household’s rising medical costs. She expects her Medicare Part D premiums and prescription expenses to rise after a temporary subsidy ends at the end of the year. Ufkin said the COLA "doesn’t even meet what they’re going to do for changes to Medicare," and noted that a medication she and her husband take could jump from $11 to $200 per month.

Senior advocacy groups warn that such expenses could absorb much of the additional money retirees receive. AARP CEO Dr. Myechia Minter‑Jordan said that one in five older Americans have no retirement savings and that many feel financially insecure, making the COLA critically important.

The increase also raises concerns about whether it will be enough to offset other rising costs. Jaime Jakubczak, a 68‑year‑old retiree from Buffalo, New York, who retired at 55, has returned to work to cover expenses, especially rising property taxes. He said the 3.6% COLA would be offset by inflation and a proposed 3.9% property tax increase in his town, calling the adjustment a "pittance."

An AARP poll conducted in September found that about three‑quarters of Americans aged 50 and older disagreed that a 3.5% COLA in 2027 would be sufficient to keep pace with rising prices.

The COLA announcement comes alongside a projected increase in the maximum annual earnings subject to Social Security payroll taxes. The wage cap will rise to $192,300 in 2027 from $184,500 in 2026.

The June 2026 Social Security and Medicare trustees’ report projects that the combined Social Security trust funds will be unable to pay full scheduled benefits beginning in 2034 unless Congress addresses the funding shortfall. After that point, incoming revenue would cover about 83% of scheduled benefits, meaning beneficiaries could face reductions if the shortfall remains unresolved.

For retirees already struggling with rising household expenses, the combination of near‑term inflation and uncertainty over Social Security’s long‑term finances adds to concerns about their financial security.