Social Security will lift benefits 3.6% in 2027, the biggest raise in four years, but advocates say retirees still can't keep up with rising costs.
The Social Security Administration announced Wednesday a 3.6 percent cost-of-living adjustment for 2027, a raise that will reach more than 75 million Americans who rely on the program.
CBS News reported the average monthly Social Security payment will climb by roughly $75, to about $2,170, starting in January. About 7.3 million Supplemental Security Income recipients will see the new rate reflected beginning Dec. 31, 2026.
The increase is the largest annual boost in four years and tops the 2.8 percent adjustment paid in 2026. That earlier rate lagged the Consumer Price Index for seven straight months. Officials tie the bigger 2027 COLA to higher inflation this year, including energy costs. The Labor Department said Wednesday the CPI rose at an annual rate of 3.7 percent in September.
For many retirees, the math still does not add up. A larger check arrives after years of eroded purchasing power, and the costs that hit older Americans hardest keep rising faster than the benefit formula allows.
SSA sets the COLA each fall using the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. The agency looks at inflation data from July through September, then applies the percentage to benefits the following year.
On paper, 3.6 percent looks like relief. In practice, seniors’ groups say it mainly covers ground already lost.
Shannon Benton, executive director of the Senior Citizens League, told CBS News the raise does not reverse earlier damage.
"While a 3.6% COLA is certainly welcome, it wouldn't necessarily restore the purchasing power seniors have already lost."
Benton added that COLAs “are designed to keep pace with inflation, not make up for years of falling behind.” Her bottom line was blunt: seniors are not getting ahead. They are receiving a slightly bigger check to pay bills that have grown even larger.
Nancy Altman, president of Social Security Works, made the same point in an email. “People are getting crushed by prices,” she wrote. “As important as the Social Security COLA is, it is not keeping up with prices.”
An AARP survey taken ahead of the announcement found about three-quarters of older Americans said a 3.5 percent inflation adjustment would not be enough to keep up with rising prices. AARP CEO Myechia Minter-Jordan released a statement Wednesday underscoring the pressure.
"There's a lot on the line financially right now for older Americans: 1 in 5 have no retirement savings, and more people feel financially insecure this year than last."
She warned that Americans cannot afford cuts to benefits they have earned, whether through changes to payments or the COLA itself.
Medicare has not yet announced 2027 premiums. Part B premiums are automatically deducted from Social Security checks, so any premium jump will shrink the net gain before retirees spend a dollar.
Tyler End, a certified financial planner and CEO of Retirable, told CBS News that healthcare inflation routinely outruns the COLA.
"For some retirees, a significant portion of their COLA increase can be absorbed by healthcare costs before they even have a chance to spend it elsewhere."
End noted healthcare inflation runs about 5.8 percent a year while the COLA has averaged 2.4 percent. Even a 3.6 percent adjustment, he said, only goes so far when the costs retirees face most heavily keep rising faster than their benefits.
Government data show the senior poverty rate rose to 15.4 percent last year from 14.2 percent in 2022. The Census Bureau said last month that Social Security remains the largest antipoverty program in the United States. Those two facts sit side by side: the program keeps millions above the line, yet more older Americans are slipping under it.
Max Richtman, president of the National Committee to Preserve Social Security and Medicare, argues the current formula understates what seniors actually pay. His group wants Congress to switch to the Consumer Price Index for the Elderly, or CPI-E.
"We favor the adoption of the CPI-E (Consumer Price Index for the Elderly), which calculates the impact of inflation on seniors' true living costs."
Without a more adequate formula, Richtman said, seniors will keep treading water or falling behind rather than catching up. The committee has endorsed the Social Security Expansion Act and the Social Security 2100 Act, bills that would make that switch among other changes.
Those proposals face the same hard constraint every Social Security debate eventually hits: the trust fund.
The Social Security trust fund is projected to become insolvent in six years. Unless lawmakers agree on remedies, benefits face a cut of more than 20 percent in 2032.
That deadline is not abstract for the 75 million people who will cash the 2027 COLA. A 3.6 percent raise next January does nothing to close the long-term gap. It does not change the payroll-tax base, the full retirement age, or the benefit formula that drives the shortfall. It simply adjusts this year’s checks to last summer’s prices.
Retirees will notice the extra $75. They will also notice grocery bills, rent, prescription costs, and Medicare premiums that move on their own schedule. The COLA follows wage-earner inflation. Older households spend differently. That mismatch is why Benton, Altman, Richtman, and End all describe the same pattern: a welcome bump that still leaves seniors behind.
Washington can announce a percentage every October. It has not fixed the program that must pay those checks a decade from now. Seniors living on fixed incomes should not have to choose between a slightly larger deposit and a solvent system. Lawmakers who treat the trust-fund deadline as someone else’s problem are the ones writing the next cut.
