Social Security beneficiaries are waiting for the 2027 cost-of-living adjustment (COLA), which determines how much monthly benefits will increase to account for inflation. The adjustment affects retirement, disability, and survivor benefits, as well as Supplemental Security Income (SSI). The Social Security Administration (SSA) is expected to announce the new adjustment in October, after the release of inflation data for the third quarter.

Until the agency confirms the percentage, beneficiaries should treat estimates as projections rather than official figures. How is the 2027 Social Security COLA calculated? The SSA calculates the annual COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure published by the Bureau of Labor Statistics.

The agency compares the average index for July, August, and September with the average for the same months in the previous year. If the CPI-W increases, Social Security benefits are adjusted according to the formula established by law. If there is no increase in the index, there is generally no COLA.

The final percentage determines how much the benefits will rise in dollar terms. Because recipients receive different monthly amounts, the increase will not be the same for everyone. When will beneficiaries receive the higher payments?

The 2027 COLA will apply to Social Security benefits payable in January 2027. Eligible recipients do not need to submit an application because the adjustment is automatic. SSI recipients will receive the increase in the payment scheduled for December 31, 2026, because January 1 is a federal holiday.

This early deposit is the regular January SSI benefit, not an additional payment. The SSA provides information about the adjustment and individual benefit notices through its official website and beneficiaries’ my Social Security accounts. Why a higher COLA does not always mean more money in your pocket The COLA increases benefits by a percentage, so the additional dollar amount depends on each recipient’s existing payment.

Someone receiving a larger monthly benefit will generally receive a larger increase in dollars than someone receiving a smaller benefit. Recipients enrolled in Medicare should also consider changes to their Part B premiums, which can affect the amount deducted from their Social Security payments. In addition, increases in housing, food, and healthcare costs may reduce the practical impact of the adjustment.