Here’s how much Social Security benefits are increasing at the start of 2027.
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It’s no secret that inflation and the cost of living have increased throughout the country, making it harder for Americans to afford essential purchases, such as groceries, utilities and health care.
To make up for the loss of purchasing power, the Social Security Administration recently announced it will increase monthly benefits for recipients starting in 2027.
Social Security is the retirement foundation for 185 million workers who contribute with every paycheck.
Known as a cost-of-living adjustment, the announcement should provide breathing room for millions of retirees and people on disability, according to the AARP.
“There’s a lot on the line financially right now for older Americans: one in five have no retirement savings, and more people feel financially insecure this year than last,” AARP CEO Dr. Myechia Minter-Jordan said in a press release. “That makes Social Security’s cost-of-living adjustment critically important. It helps millions of Americans keep up with rising costs for groceries, routine bills, health care and other everyday expenses.”
Earlier this year, a non-partisan report revealed the government agency was exceeding its cash income and was forced to dip into its reserve trust fund. If nothing changes, that trust fund will be depleted by 2032, and Social Security recipients would see an average monthly budget cut of $500.
In the meantime, South Carolinians will see their monthly benefits increase by this much, thanks to the cost-of-living adjustment:
How much will Social Security benefits increase?
Beginning of 2027, monthly payments to 72 million Social Security beneficiaries will increase by 3.7%. Increased payments to about 7.3 million SSI recipients will begin on December 31, 2026.
On average, this is an increase of $75 a month or $900 a year. According to AARP, the estimated average monthly Social Security benefits payable before the increase is $2,095. With the bump, that number will increase to $2,170.
The non-profit group says any increase in benefits payable is welcome, but a new AARP poll says that most people feel that a 5% to 7% increase would be better just to keep up with inflation.
AARP is the nation’s largest nonprofit organization that has worked to increase benefits for retired persons across the country.
“AARP fought for the creation of the COLA in 1972 and has defended it ever since. Without it, millions more older Americans would be living in poverty,” Dr. Myechia Minter-Jordan said in the press release. “That’s why we are fighting every day to protect and strengthen Social Security for generations to come. Americans cannot afford cuts to the benefits they have earned – whether through changes to their hard-earned payments or the COLA.”
What else is changing?
The maximum amount of earnings subject to the Social Security tax will increase to $192,300, according to the SSA’s website.
You can start earning Social Security retirement benefits as soon as you turn 62 years old, but if you delay taking your benefits from your full retirement age, up to age 70, your benefit amount will increase.
The earnings limit for workers who are younger than full retirement age will increase to $25,560, and the earnings limit for people reaching their full retirement age in 2027 will increase to $67,920.
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