The 2027 Social Security COLA is 3.6%: the math and the numbers
On October 14, the Social Security Administration announced a 3.6 percent cost-of-living adjustment for 2027. It’s the number our indexing explainer said would become calculable on that day. Now it’s official, along with the rest of the annual adjustments in SSA’s 2027 fact sheet. Here is where the 3.6% comes from, what else changed, and what the figures mean for a retirement projection.
This is educational content about how the rules work, not financial advice.
The 3.6%, from the table
The COLA formula is set by the Social Security Act and uses the CPI-W, which the Bureau of Labor Statistics computes monthly. The raise equals the percentage increase in the average CPI-W for July, August and September of the current year over the same average in the last year a COLA took effect (2025). The result is rounded to the nearest tenth of a percent.
SSA’s published table:
| CPI-W | 2025 | 2026 |
|---|---|---|
| July | 316.349 | 327.104 |
| August | 317.306 | 328.481 |
| September | 318.139 | 330.654 |
| Q3 average | 317.265 | 328.746 |
(328.746 − 317.265) ÷ 317.265 × 100 = 3.6%
Two things worth noticing. First, the raise is entirely a function of three monthly readings; the rest of the year’s inflation doesn’t enter. Second, September did the lifting: it came in at 330.654, about 0.66% above August. When we ran the arithmetic with only July known, a flat August and September would have produced 3.1%. The actual path ended half a point higher.
For comparison, last year’s COLA was 2.8%. See the Social Security timing guide for how COLAs compound over a retirement.
Who gets it and when
Per SSA’s press release:
- Nearly 72 million Social Security beneficiaries see the 3.6% beginning in January 2027 (it applies to December 2026 benefits, payable in January).
- About 7.3 million SSI recipients see higher payments starting December 31, 2026. Some people receive both.
- On average, retirement benefits rise by $75 per month.
SSA’s fact sheet estimates average monthly benefits before and after the COLA:
| Beneficiary group | Before | After 3.6% |
|---|---|---|
| All retired workers | $2,095 | $2,170 |
| Aged couple, both receiving benefits | $3,238 | $3,355 |
| Aged widow(er) alone | $1,936 | $2,005 |
| All disabled workers | $1,642 | $1,701 |
Averages hide a lot of spread. For an individual, the arithmetic is simple: multiply the current benefit by 1.036. A $2,000 monthly benefit becomes $2,072, and a $3,000 benefit becomes $3,108. SSA says personal my Social Security account holders can view their COLA notice online starting in late November; others get a mailed notice in December.
What else the fact sheet changed
The COLA is not the only number that moves on January 1. The other adjustments follow different formulas, and they move by different amounts.
| 2026 | 2027 | |
|---|---|---|
| Maximum taxable earnings (Social Security) | $184,500 | $192,300 |
| Quarter of coverage | $1,890 | $1,970 |
| Earnings test, under full retirement age | $24,480/yr | $25,560/yr |
| Earnings test, year you reach full retirement age | $65,160/yr | $67,920/yr |
| Max benefit, worker retiring at full retirement age | $4,152/mo | $4,188/mo |
| SGA, non-blind (disability) | $1,690/mo | $1,770/mo |
Source: SSA 2027 COLA Fact Sheet.
A few of these deserve a closer look.
The taxable maximum: +$7,800
The 6.2% Social Security payroll tax (employee side; self-employed pay 12.4%) applies to earnings up to the taxable maximum. At $192,300, the most an employee pays in Social Security tax on wages is 6.2% × $192,300 = $11,922.60, versus $11,439 on $184,500 in 2026. The Medicare portion, 1.45%, has no cap. The combined 7.65% employee rate and 15.30% self-employed rate are unchanged.
The earnings test: roughly +4.4%
If you claim before full retirement age and keep working, the exempt amount rises to $25,560 a year. Earn above it and SSA withholds $1 of benefits for every $2 over. In the calendar year you reach full retirement age the limit is $67,920, with $1 withheld per $3 over, and only earnings before the month you reach full retirement age count. From that month on there is no limit. The lower limit rises about 4.4% ($25,560 vs $24,480), faster than the COLA, because the exempt amounts follow average wage growth, not consumer prices. Our earnings test walkthrough covers the mechanics and what happens to withheld months.
The maximum benefit: a different animal
The maximum benefit for someone retiring at full retirement age rises from $4,152 to $4,188 a month, under 1%. That’s not the COLA percentage applied to the maximum; SSA lists it as a separate line in the fact sheet. The 3.6% COLA applies to benefits already in payment, so don’t assume a new retiree’s benefit rises by 3.6% too.
What the number doesn’t tell you
It’s gross. The COLA is applied to the benefit before deductions. Medicare Part B is usually deducted from the payment, and its 2027 amount wasn’t part of SSA’s announcement. SSA says 2027 Medicare information will be on medicare.gov, and that enrollees can see their premium in the my Social Security Message Center starting in late November. Until that figure is known, the net raise is not known either. Our indexing post shows how a $17.90 Part B increase ate into a 2.8% raise.
It’s the same percentage for everyone, but not the same dollars. A bigger benefit gets a bigger dollar raise. A claimant waiting until 70 gets the COLA on a larger base, a point covered in when to take Social Security and the spousal and survivor benefits guide.
It’s one year. A projection that assumes this year’s 3.6% every year will overstate; one that assumes zero will understate. The long-run average in a plan is an assumption, not a fact, and it deserves a deliberate choice.
Using the 2027 figures in a plan
If you model Social Security in a retirement projection, three inputs refresh this January: the benefit amount (×1.036 if you’re already collecting), the taxable maximum if you’re still working, and the earnings-test thresholds if you’ve claimed early. cinder.fi’s Social Security calculator and US retirement calculator let you compare claiming ages and test different future COLA assumptions side by side. For a broader checklist of what to revisit at year-end, see the retirement planning checklist.
Figures are from the Social Security Administration’s October 14, 2026 press release, 2027 COLA fact sheet and latest-COLA page. Check ssa.gov for your own benefit details.