Social Security's 2027 COLA is 3.6%: how it's calculated and what it does and doesn't change

On October 14, 2026, the Social Security Administration (SSA) announced that Social Security and Supplemental Security Income (SSI) benefits for 76 million Americans will increase 3.6 percent in 2027. That is a larger adjustment than the 2.8 percent SSA announced for 2026. This explainer covers how the cost-of-living adjustment (COLA) is calculated, what SSA announced, and what the number does and doesn't tell you. It is a guide to the mechanics, not benefits advice.

What SSA announced for 2027

According to SSA's COLA page and its October 14, 2026 announcement:

• The COLA is 3.6 percent, applying to Social Security and SSI benefits for 76 million Americans.
• Social Security benefits rise with benefits payable for January 2027.
• SSI payments rise beginning December 31, 2026.
• The taxable maximum (the cap on earnings subject to the Social Security payroll tax) rises from $184,500 to $192,300.

SSA notifies beneficiaries of their new amount after the announcement; that notice, not a news summary, states your amount.

How the COLA is calculated

SSA describes the adjustment as based on a price index, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. SSA's announcement of the 2026 increase said the 2.8 percent COLA was based on the increase in CPI-W from the third quarter of 2024 through the third quarter of 2025. The 2027 figure follows the same method, comparing the third quarter of 2026 with the third quarter of 2025.

Three details are worth taking from that:

• It's a third-quarter measure. The comparison uses the July-through-September readings, not a single month and not the full year.
• It uses CPI-W, not the headline CPI-U. The two indexes cover different populations and can differ slightly. The inflation figure you see in a news headline is usually CPI-U.
• It compares one third quarter with the prior year's third quarter. That is why the September CPI report, the last month of data, was the final input.

For the underlying price data, see the BLS Consumer Price Index release and our August CPI explainer. In August, BLS reported CPI-W up 3.5% over the 12 months ending that month; the COLA window is the third-quarter average, which is why that 12-month figure was never the COLA itself.

Year-over-year comparison

• 2026: 2.8 percent, announced by SSA on October 24, 2025.
• 2027: 3.6 percent, announced by SSA on October 14, 2026.

SSA's 2026 announcement said the increase reached nearly 71 million Social Security beneficiaries in January 2026, and nearly 7.5 million SSI recipients beginning December 31, 2025.

What the COLA does and doesn't change

The COLA adjusts benefit amounts, so it affects what arrives in your account. A few cautions on reading it:

• It is an average rule, not your personal inflation rate. A retiree who spends heavily on health care, rent or energy may see prices rise differently from the index.
• Other deductions can move too. Medicare premiums and other items are announced separately by the relevant agencies. SSA's COLA announcement is not a statement about your net deposit.
• Your amount depends on your situation. Individual amounts depend on your benefit type and record.
• Taxes are separate. Whether any of your benefits are taxable depends on your income. See our 2026 federal tax brackets explainer for how marginal rates work.

A practical checklist

• Read SSA's announcement on ssa.gov rather than a secondhand summary.
• Watch for your SSA notice, and check the amount against your bank deposit once it starts.
• Compare the COLA with the inflation figures you care about: the CPI-U headline and your own budget categories.
• If you hold savings or CDs, set the APY against current inflation. Our explainer on APY versus APR covers how to read those numbers. For inflation-linked savings, see our I Bonds guide.

How we sourced this

Every figure above comes from SSA or BLS: the 3.6 and 2.8 percent COLAs, the third-quarter method and the taxable maximum from SSA, and the CPI figures from BLS. We attribute each number to its source for the same reason we publish our methodology: you should be able to check it yourself. ClearValue is a publisher and broker of information, not a benefits agency or adviser, and nothing here is personal financial or benefits advice.

The takeaway

The 2027 COLA is 3.6 percent, based on third-quarter CPI-W compared with a year earlier. It raises benefit amounts, but your net deposit also depends on deductions announced separately. Use your SSA notice for your own number.