Analysis
The adjustment follows a formula tied to inflation: it equals the rise in the for urban wage earners and clerical workers from the third quarter of last year to the third quarter of this year. The recent run-up in gasoline and other energy prices is why it is larger than the 2.5% and 2.8% increases of the past two years, though well below the 8.7% increase for 2023.
What changes
Benefits for nearly 72 million Social Security beneficiaries will rise 3.6% starting with payments in January 2027, and payments to about 7.3 million Supplemental Security Income recipients will rise starting December 31, 2026 [1]. Some people receive both, which is why the agency's combined total is about 76 million rather than the sum of the two figures [1].
The maximum amount of earnings subject to the Social Security payroll tax rises to $192,300 [1]. For people working while collecting benefits before full retirement age, the annual earnings limit rises to $25,560 from $24,480, with $1 withheld for every $2 earned above it; for those reaching full retirement age in 2027, the limit rises to $67,920, with $1 withheld for every $3 above it [1].
How the figure is set
By law, the adjustment is based on the percentage increase in the for urban wage earners and clerical workers (CPI-W) from the third quarter of the last year a COLA was set to the third quarter of the current year [1]. The Bureau of Labor Statistics reported the same morning that this index rose 3.9% in the 12 months to September [2].
The 2027 increase compares with 2.8% for 2026, 2.5% for 2025, 3.2% for 2024 and 8.7% for 2023 [1]. Beneficiaries' notices with their new amounts will be available online in late November and by mail in December, the agency said [1].
What remains uncertain
Individual changes depend on each person's benefit, and Medicare premiums for 2027, which are often deducted from Social Security payments, had not been announced in the agency's release. The agency's full press release link was not loading when checked; figures come from its COLA information page.