--- title: The 3.6% Social Security COLA Could Finally Feel Like a Raise for Retirees in 2027 description: Social Security benefits will rise 3.6% in 2027. If inflation cools, the COLA could outpace price increases and boost spending power. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 611 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes published: '2026-10-29T16:45:11.000Z' modified: '2026-10-29T16:45:11.000Z' section: Retirement tags: - News word_count: 567 canonical: https://money.com/social-security-cola-outpace-inflation/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![A hand with social security check over a cart of grocery items](https://img.money.com/2026/10/News-Cola-inflation-Socialsecurity-1.jpg) The 2027 Social Security cost-of-living adjustment, or COLA, could outpace inflation and boost Baby Boomers' spending power next year. If inflation cools next year as economists predict, the COLA could feel like a raise to beneficiaries, a new [Bank of America Institute report](https://institute.bankofamerica.com/economic-insights/older-generation-spending.html?utm_source=Email_Institute&utm_medium=Email&utm_campaign=Media_Spending_October_26&utm_content=102726_n_04_economic-insights/older-generation-spending.html) said. The Social Security Administration [announced](https://money.com/social-security-cola-2027-announcement/) on Oct. 14 that the COLA will be 3.6%, the largest increase since 2023. It is set to take effect in January for most recipients, giving a $75 average bump to [monthly retirement benefits](https://money.com/social-security-check-this-month/). The question beneficiaries are asking: Will it be enough? Advocacy groups such as the Senior Citizens League say firmly that the answer is no. "A 3.6% COLA is not enough!" John Adams, the organization's chairman, said in an email blast Tuesday, adding that it won't cover "the rising cost of everyday essentials." As measured by the consumer price index for urban wage earners and clerical workers, or the [CPI-W](https://www.bls.gov/news.release/cpi.nr0.htm), the annual inflation rate is 3.9%, several notches higher than the 2027 COLA. ## How the COLA compares with projected inflation Comparing the COLA with current inflation isn't the only way to assess the increase. The Bank of America Institute explains in the report that there's historically a connection between the COLA and retirees' spending in the year it takes effect. The Social Security COLA is a routine cost-of-living increase mandated by federal law. It's supposed to ensure that benefits rise in tandem with prices. It usually doesn't make or break retirees' finances. "But when inflation is close to a turning point, the increase can end up looking relatively high or low compared with inflation over the course of the following year," David Tinsley, senior economist at the Bank of America Institute, wrote in the report. The COLA is calculated by comparing average CPI-W inflation in the third quarter of the year with inflation in the third quarter of the previous year. Retirees' benefits would rise faster than prices if the COLA beats inflation, giving some older Americans a bit of breathing room in their budgets. Looking at the 2023 COLA as the most recent example, Bank of America observed a link between the 8.7% adjustment, which far outpaced inflation that year, and slow spending growth among Baby Boomers and the Silent Generation. The report says 2027 could be a mini-repeat of 2023. "The consensus expectation is that CPI inflation is likely to cool over 2027, largely reflecting the lessening impact of higher gasoline prices," Tinsley wrote. In that case, benefits would rise more than prices in 2027. But near-term inflation is difficult to predict, and the shocks to energy prices are ongoing. Tinsley's report highlights the unique mix of income streams among Americans 60 and older, who may be collecting pensions and Social Security, and who typically receive more income from interest, dividends and rental properties than younger generations. Low unemployment rates and wage growth have been primary drivers of economic gains for workers. However, that doesn't mean much for people who have retired. Bank of America's data shows that older generations' discretionary spending growth has lagged younger generations' for roughly a year. It's another reason the COLA can't come soon enough for tens of millions of Social Security beneficiaries. The bottom line: "If these \[inflation\] expectations prove correct, households that rely on Social Security may receive a more impactful boost to their budgets next year than they have for the last few," Tinsley wrote. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/social-security-cola-outpace-inflation/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Social Security", "item": "https://money.com/social-security/" }, { "@type": "ListItem", "position": 4, "name": "The 3.6% Social Security COLA Could Finally Feel Like a Raise for Retirees in 2027" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/social-security-cola-outpace-inflation/#webpage", "url": "https://money.com/social-security-cola-outpace-inflation/", "name": "The 3.6% Social Security COLA Could Finally Feel Like a Raise for Retirees in 2027", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-10-29T16:45:11.000Z", "mainEntity": { "@id": "https://money.com/social-security-cola-outpace-inflation/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/social-security-cola-outpace-inflation/#breadcrumb" }, "dateModified": "2026-10-29T16:45:11.000Z" }, { "@type": "NewsArticle", "headline": "The 3.6% Social Security COLA Could Finally Feel Like a Raise for Retirees in 2027", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/10/News-Cola-inflation-Socialsecurity-1.jpg", "width": 2880, "height": 1920, "caption": "News-Cola-inflation-Socialsecurity-1" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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