The Social Security Administration (SSA) has announced a 3.6% cost-of-living adjustment (COLA) for 2027, affecting Social Security and Supplemental Security Income (SSI) benefits for 76 million Americans. The agency's official announcement also sets out payment timing and updated earnings thresholds.
When the increased benefits will be paid
The adjustment starts with December 2026 Social Security benefits, payable in January 2027. SSA says nearly 72 million Social Security beneficiaries will receive the increase.
For about 7.3 million SSI recipients, increased payments begin on December 31, 2026. That payment is for January 2027: because January 1 is a holiday, January SSI payments are made at the end of the previous December. SSA explains this distinction on its latest COLA page. Some people receive both Social Security and SSI benefits.
Taxable maximum and earnings-test limits
The maximum earnings subject to Social Security tax will rise to $192,300 in 2027, according to SSA's automatic adjustments table.
The retirement earnings test has separate limits for beneficiaries who work before full retirement age:
| Worker's status in 2027 | Earnings limit | Benefit deduction above the limit |
|---|---|---|
| Under full retirement age throughout the year | $25,560 | $1 for every $2 earned above the limit |
| Reaches full retirement age during the year | $67,920 | $1 for every $3 earned above the limit; only earnings before the month of full retirement age count |
SSA's COLA announcement confirms these deduction rules. There is no earnings limit for workers who are at full retirement age or older for the entire year. See how your own savings fit alongside benefits with our retirement calculator.
How SSA calculated the 3.6% COLA
The calculation uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, produced by the Bureau of Labor Statistics (BLS). SSA compares the third-quarter averages shown in its COLA computation:
| Period | Average CPI-W |
|---|---|
| Third quarter of 2025 | 317.265 |
| Third quarter of 2026 | 328.746 |
The percentage change is (328.746 - 317.265) / 317.265 × 100 = 3.6%, rounded to the nearest tenth of a percentage point. The calculation uses quarterly averages rather than a single month's inflation rate.
September inflation provides context
In its September 2026 CPI release, published October 14, 2026, BLS reported that the CPI for All Urban Consumers (CPI-U) rose 0.6% for the month, seasonally adjusted, and 3.7% over the previous twelve months.
The CPI-W rose 3.9% over the previous twelve months to 330.654 in September. Those September annual changes measure a different period from the quarterly-average comparison used for the COLA.
Related retirement and budgeting background
Our guides to retirement account contribution limits and Roth versus traditional IRAs explain retirement saving. For background on household cash flow and reserves, see emergency-fund planning.
This content is for general education and is not financial advice.
