Social Security sets a 3.6% COLA for 2027, lifting average retired-worker checks by $75

Monthly Social Security payments will rise 3.6% in January, adding about $75 to the average retired worker's check and bringing it to $2,170, the Social Security Administration said Wednesday. AdvisorHub reported the increase reaches nearly 72 million beneficiaries and is the largest cost-of-living adjustment in four years. Supplemental Security Income recipients see higher payments starting Dec. 31.

The maximum amount of earnings subject to the Social Security tax rises to $192,300 from $184,500, so $7,800 more of a high earner's pay is taxed in 2027. The SSA bases the annual adjustment on the third-quarter change in the consumer price index for urban wage earners and clerical workers, a group the Bureau of Labor Statistics puts at about 30% of the population. The announcement came the same day a separate inflation gauge accelerated in September to its fastest pace in five months.

The $75 is an average across retired workers, not any single beneficiary's increase, so advisors should re-pull each household's benefit amount rather than scale a plan by 3.6%. Because the adjustment applies to the benefit itself, the dollar value of a claiming decision moves up with it, a distinction that matters for clients still choosing a filing date.

Withdrawals from investment accounts equaled nearly 15% of annual spending for top earners in 2025, up from 8% in 2019, according to the JPMorganChase Institute, as cited by AdvisorHub. For those households, $75 a month is small beside portfolio draws, so the COLA may be more useful as a check on a plan's inflation assumption than as income replacement.