All Social Security beneficiaries will get a 3.6% increase in benefits starting in January, thanks to the 2027 cost-of-living adjustment (COLA) announced on October 14. The boost is slightly larger than recent estimates and above the 50-year average. However, the large COLA will significantly raise Social Security's costs, adding roughly $75 per month for the average recipient, or about $900 a year. The program has paid out more than it takes in since 2021, relying on trust funds to cover the gap, and the June 2026 Trustees Report projects those funds will be depleted by the fourth quarter of 2032, which could trigger a 23% benefit cut without government action. The 2027 COLA could accelerate that deadline, though the size of the effect won't be known until the next Trustees Report. The article expects the government to act, possibly by raising payroll taxes or the full retirement age, and says Americans can only budget carefully and stretch their savings for now.
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The Social Security Administration said the 2027 cost-of-living adjustment (COLA) will be 3.6%, raising retirement benefits by about $75 per month on average. The increase covers 76 million Americans, with around 72 million seeing it in January, and about 7.3 million SSI beneficiaries receiving higher payments starting Dec. 31. The 3.6% figure matches experts' projections of 3.5% to 3.6% and is the largest increase since 2023, when benefits rose 8.7%. The announcement came as new government data showed consumer prices accelerating, with the CPI up 3.7% over the past 12 months as gas prices jumped.
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According to the BLS report released Oct. 14, the CPI-W for September rose 3.9% from a year earlier, above the 3.7% headline CPI. The CPI-W is used to calculate the annual cost-of-living adjustment (COLA) for Social Security. Averaging the July (3.4%), August (3.5%) and September (3.9%) readings gives a 3.6% COLA for 2027, or about $75 a month ($902 a year) for the average retired worker, who currently receives about $2,088 a month. The article argues that this inflation, while higher than many would like, is well below the extremes of 2022 or the late 1970s to early 1980s, and need not necessarily prompt big changes to stock holdings.
- Inflation for Urban Wage Earners Hit 3.9% in September. Here's What That Means for Social Security and Your Portfolio.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 3.9% year over year in September, according to the BLS report released October 14, above the overall CPI rate of 3.7%. The CPI-W sets the annual cost-of-living adjustment (COLA) for Social Security, and the 2027 COLA is projected at 3.6%, the average of the July (3.4%), August (3.5%) and September (3.9%) readings. For the average retired worker receiving about $2,088 a month in 2026, that works out to roughly $75 more per month, or $902 per year. The article argues current inflation remains well below the extreme levels of 2022 and the late 1970s to early 1980s.
- Inflation for Urban Wage Earners Hit 3.9% in September. Here's What That Means for Social Security and Your Portfolio.
The CPI-W, the index used to set Social Security cost-of-living adjustments (COLA), rose 3.9% from a year earlier in September 2026, above the broader 3.7% CPI. The 2027 COLA is projected at 3.6%, the average of the July (3.4%), August (3.5%) and September (3.9%) readings. Applied to the average retired worker's benefit of about $2,088 per month in 2026, that works out to roughly $75 per month, or $902 per year. The article argues this inflation does not require major changes to a stock portfolio, since current CPI is only slightly above its 50-year average. For investors worried about inflation, it suggests options such as low-cost index funds, short-term bonds, commodities, energy and financial stocks, and REITs.
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The Social Security Administration has announced a 3.6% cost-of-living adjustment for about 72 million recipients in January, above the 3.4% median wage growth for job stayers. Independent economist Aaron Terrazas notes COLA exceeded job-stayers' raises in three of the past six years, because retiree income is indexed to living costs while most workers are paid according to labor costs. The three-month average wage growth for job switchers was higher than both figures, but finding a new job may be hard depending on the field, especially in white-collar work where job losses have occurred. The labor market is in a low-hire, low-fire period, so layoffs are low, yet many job seekers feel insecure despite steady overall job numbers.
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