(October 14, 2026) Social Security benefits will increase by 3.6% in 2027 for 76 million Americans, the Social Security Administration (SSA) announced today, the largest annual cost-of-living adjustment (COLA) increase since 2023. On average, Social Security retirement benefits will increase by about $75 per month.

Nearly 72 million Social Security beneficiaries will see a 3.6% increase in their monthly benefits starting in January 2027. Increased payments to about 7.3 million people receiving Supplemental Security Income (SSI), a federal support program for those with limited income and resources, will begin on December 31, 2026. Some people receive both Social Security benefits and SSI.

The average retirement benefit will increase to $2,170 per month in 2027, up from $2,095 per month this year. The average retirement benefit for households where both elderly spouses receive Social Security benefits will rise to $3,355 per month in 2027, up $117 per month from $ 3,238 this year, SSA said.

Beginning in 2027, all new Social Security beneficiaries will have a full retirement age of 67, the final step in the gradual increase in the full retirement age authorized by the Social Security reforms of 1983. That legislation gradually boosted the full retirement age in two-month increments from 66, for those people born from 1946 through 1954, to 67 for people born in 1960 and later.

Individuals who postpone claiming Social Security beyond their full retirement age earn an extra 8% per year (0.66% per month) for every year they delay collecting benefits up to age 70. Delayed retirement credits are in addition to the retirement benefit amount you can collect at full retirement age.

By law, the annual inflation adjustment in Social Security benefits is based on the average inflation during July, August, and September of the current year as measured by the Consumer Price Index for Urban Wage Earners. The Bureau of Labor Statistics (BLS) averages the CPI-W for those three months of this year and compares it to the same period from the previous year. The percentage difference between the two COLAs determines the benefit increase for the following year. BLS said higher gasoline prices were responsible for the bulk of the increase in the Consumer Price Index for September. Social Security’s 3.6% COLA for 2027 follows a 2.8% increase in 2026, a 2.5% increase for 2025, and a 3.2% increase in 2024—all far short of the whopping 8.7% increase in 2023.

Social Security will begin notifying people about their new benefit amount by mail starting in early December. Individuals who have set up a personal my Social Security account by November 18, 2026, can view their 2027 COLA notice online even sooner. To get started, visit www.ssa.gov/myaccount.

Individuals who claim Social Security benefits before their full retirement age and who continue to earn money from wages or self-employment will be able to earn more money in 2027 before forfeiting any Social Security benefits to annual earnings limitations.

In 2027, individuals who are under full retirement age for the entire year will be able to earn up to $25,560 per year ($2,130 per month) and still collect full Social Security benefits. Individuals who collect Social Security benefits before their full retirement age and who continue to work and earn more than $25,560 per year ($2,130 per month) next year will forfeit $1 in benefits for every $2 earned over that limit.

In the year an individual reaches full retirement age, he or she can earn more money without forfeiting any benefits. In 2027, the new earnings limit is $ 67,920 per year ($5,660 per month), up from $65,160 in 2026 ($5,430 per month). If their earnings exceed that limit, they will forfeit $1 in Social Security benefits for every $3 earned over that limit.

Earnings restrictions disappear at full retirement age, and any benefits lost due to excess earnings are restored in the form of larger monthly benefits going forward.

Social Security is funded primarily by a payroll tax of 12.4% on wages, with both employers and employees paying 6.2% of gross wages up to the taxable maximum amount. Self-employed workers pay both portions of the payroll tax for a total rate of 12.4%.

Higher-income workers will pay more in payroll taxes next year as the maximum wages subject to FICA taxes will increase to $192,300 in 2027, up from $184,500 this year. The additional $7,800 in taxable wages in 2027 could boost payroll taxes by an additional $484 for high-income wage earners and by an additional $967 for self-employed individuals next year.

Workers who earn more than the maximum taxable amount do not pay Social Security taxes on the excess earnings. However, all earnings—even those above the Social Security taxable maximum amount—are subject to a 1.45% Medicare payroll tax. Self-employed individuals pay a combined Medicare tax rate of 2.9%. In addition, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9% in Medicare taxes.