Social Security benefits will rise by 3.6% in 2027, the Social Security Administration announced Oct. 14 — the largest cost-of-living adjustment since 2023.
That’s a substantial hike from the 2.8% hike in 2026 and reflects rising inflation. The announcement was made just after the consumer price index for September, which found that inflation increased 0.6% in September and rose 3.7% year-over-year.
On average, Social Security retirement benefits will increase by $75 per month, the Social Security Administration said. Roughly 72 million people, including retirees and disabled workers who qualified based on their medical conditions and work histories, will see the benefits increase in their Social Security payments starting in January.
Increased payments to about 7.3 million people receiving Supplemental Security Income (SSI) — a separate, needs-based program for low-income individuals age 65 and older, as well as blind and disabled individuals — will begin on Dec. 31.
The Social Security Administration also announced the 2027 wage cap. The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $192,300, up from $184,500 in 2026.
The earnings limit for workers who are younger than full retirement age will increase to $25,560 in 2027 and the earnings limit for people reaching their full retirement age will increase to $67,920, the agency said.
The cost-of-living adjustment will give Social Security recipients “greater financial stability,” Commissioner Frank J. Bisignano said in a statement.
The administration posted a fact sheet summarizing the 2027 Social Security changes.
The benefit increase presents a timely opportunity for employers to discuss retirement readiness and help employees understand how Social Security fits into their overall retirement planning. HR can share the news through benefits communications, highlight available retirement calculators on the Social Security Administration website, and remind employees nearing retirement age to review their personalized benefit estimates. Given that retirement confidence and employee financial confidence remains at decade lows, proactive retirement communications can support employees during a period of widespread financial anxiety.
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