Social Security COLA 2027 Hands Retirees a Bigger Cheque, but Medicare and a 2032 Shortfall Could Claw It Back

Older Americans gain about $75 a month from January 2027, the biggest Social Security raise in four years, before deductions (Credit: Photo: Matt Bennett/Unsplash)

The Social Security Administration confirmed a 3.6% cost-of-living adjustment (COLA) for 2027 on 14 October, lifting the average retirement cheque by $75 (£56) a month from January, though Medicare costs and a 2032 shortfall could claw the gains back.

The raise reaches about 76 million Americans who draw Social Security and Supplemental Security Income (SSI), and it is the largest annual increase since 2023. It lands well above the 2.8% granted for 2026 and the 2.6% average of the past two decades.