Social Security recipients have good news heading into the new year. The Social Security Administration has announced a 3.6% cost-of-living adjustment (COLA) for 2027, giving millions of Americans a boost in their monthly benefits.

The increase will take effect in January 2027 and is the largest annual adjustment since 2023.

What Does the Increase Mean for You?

According to the Social Security Administration, the average monthly retirement benefit will increase by approximately $75. Of course, the actual dollar amount will depend on how much you currently receive.

For example, if your monthly Social Security benefit is $2,500, a 3.6% increase would add $90 per month, or $1,080 over the course of the year, before any deductions.

The annual COLA is designed to help Social Security benefits keep pace with inflation. It’s calculated using changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Keep an Eye on Medicare Premiums

While the increase is welcome news, it’s important to remember that your Social Security benefit and the amount deposited into your bank account aren’t necessarily the same.

If you’re enrolled in Medicare and have your Part B premiums deducted directly from Social Security, changes in those premiums could affect how much of the increase you actually receive.

The 2027 Medicare premium amounts have not been announced yet. Once they’re available, you’ll have a clearer picture of what your monthly benefit will look like after deductions.

When Will You Know Your New Benefit Amount?

You won’t have to calculate the increase yourself. The Social Security Administration will provide personalized notices detailing your new benefit amount and applicable deductions.

If you have a personal my Social Security account, you can view your COLA notice online beginning in late November. If you receive paper notices, yours should arrive in December.

You can also visit ssa.gov/myaccount to access or create an account.

A Good Time to Review Your Retirement Income

Even a modest increase in monthly income is a good opportunity to revisit your retirement budget. Consider how the adjustment fits into your overall income, anticipated expenses, and withdrawal strategy for the coming year.

And if you’re approaching retirement but haven’t started collecting Social Security yet, this is an especially good time to speak with your financial planner about your claiming options. When you begin collecting benefits can have a lasting impact on your retirement income, so it’s important to evaluate the decision in the context of your overall financial plan.

For more information about the 2027 adjustment, visit the Social Security Administration’s COLA page.