A Bigger Social Security Increase May Be Coming in 2027: What Future Retirees Should Know

For people nearing retirement, Social Security estimates are an important part of projecting future income. One number worth keeping an eye on this fall is the 2027 Social Security cost-of-living adjustment (COLA).

Current forecasts suggest the 2027 COLA could be approximately 3.5% to 3.6%. If those estimates prove accurate, next year’s increase would be larger than the 2.8% COLA beneficiaries received for 2026.

What could that mean in actual dollars? A 3.5% adjustment could increase the average retired worker’s monthly Social Security payment by approximately $68 to $75, although the actual dollar increase for each beneficiary will depend on the amount of his or her current benefit.

The final number has not yet been determined. Social Security COLAs are calculated using changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The official 2027 COLA is expected to be announced on October 14, 2026, following the release of September inflation data. Beneficiaries would begin receiving the adjusted amounts in January 2027.

While an increase in Social Security income is welcome, people approaching retirement should view the COLA in context.

The purpose of the annual adjustment is to help benefits retain purchasing power as prices rise. However, your personal retirement budget might experience inflation differently. Healthcare costs, housing expenses, utilities, insurance premiums, groceries, and other necessities do not necessarily increase at the same rate. A higher Social Security check therefore does not automatically translate into additional spending money.

This is one reason we encourage clients to build flexibility into their retirement plans.

Social Security may provide an important income foundation, but most retirees will need to coordinate it with other resources. Those could include 401(k) and IRA withdrawals, investment income, pensions, cash reserves, and other assets. Your claiming age can also affect the amount of Social Security income you receive throughout retirement.

Instead of viewing the projected 2027 COLA as an isolated increase, use it as a reminder to revisit your retirement projections. Are your anticipated income sources sufficient for your expected expenses? Have you accounted for inflation? How might taxes and healthcare costs affect the income you actually have available?

Retirement planning is an ongoing process rather than a calculation you make once. If retirement is approaching, schedule an appointment with our financial planning team. We can review your projected Social Security benefits and help you incorporate them into a comprehensive retirement income strategy.