Monthly checks for nearly 72 million Americans receiving Social Security benefits will increase by 3.6% in 2027, the most in four years.

The cost-of-living adjustment, known as COLA, will apply to Social Security benefits starting in January and increase the average benefit for retired workers by $75 per month to $2,170, the Social Security Administration said Wednesday. Higher payments for Supplemental Security Income recipients will begin on Dec. 31.

The annual adjustment carries particular weight for retirees who depend on Social Security for a large portion of their income.

It also comes against a backdrop of shifting retirement finances, as older Americans increasingly draw on investment accounts to support their spending. For top earners, those flows were equivalent to nearly 15% of annual spending in 2025, up from 8% in 2019, according to the JPMorganChase Institute.

The annual COLA, designed to ensure that the purchasing power of Social Security beneficiaries isn’t eroded by inflation, is calculated using the consumer price index.

Separate data out earlier Wednesday showed a gauge of inflation picked up in September to the fastest pace in five months.

The cost-of-living adjustment comes just weeks before the midterm elections, with affordability a central concern and older Americans among the most reliable voter block.

The SSA bases its annual COLA calculation on the percentage change in the CPI for urban wage earners and clerical workers in the third quarter compared with a year earlier. Those workers cover about 30% of the population, according to the Bureau of Labor Statistics.

Based on the annual adjustment, the maximum amount of earnings subject to the Social Security tax will also increase next year to $192,300 from $184,500.

(With assistance from Suzanne Woolley.)

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