Social Security's 2027 Raise: How the COLA Works and Why People Disagree About It

Every fall, Social Security sets the annual raise that tens of millions of beneficiaries will get the next year. This year the 2027 adjustment is in the news, and outlets are covering it in very different ways.

Some coverage sticks to the practical side: how much a typical check might grow and when you'll know your exact amount. Other pieces argue about whether the raise is fair, either to retirees or to the workers whose payroll taxes pay for it. This explainer covers how the raise works and why it's being debated.

What the coverage says

The Motley Fool shows what the 2027 increase might look like for someone collecting $2,000 a month. That's a handy example, because many retirees get a check somewhere near that amount.

AL.com reports that you can find out your exact 2027 increase before the new payments arrive. News4JAX published a broader guide covering cost-of-living changes, payment schedules and other basics.

Two outlets look at the bigger question. CNN's "Make It Make Sense" segment asks whether the Social Security bump is enough. National Review ran an opinion piece arguing that retirees shouldn't get bigger raises than the workers who fund the program.

These headlines don't give a specific 2027 percentage, so we don't report one here.

How the raise is calculated

Here's some background. The yearly raise is called a cost-of-living adjustment, or COLA. Its job is to help benefits keep up with rising prices.

The COLA is tied to a government inflation measure called the CPI-W, which tracks prices paid by urban wage earners and clerical workers. The Social Security Administration compares the average CPI-W for July, August and September with the same three months a year earlier. The percentage change becomes the COLA. If prices didn't rise, there's no increase.

To estimate your own raise, multiply your monthly benefit by the COLA percentage. Here's a made-up example, not a forecast: a 2% COLA on a $2,000 check would add $40 a month. A 3% COLA would add $60. The new amount usually shows up in January payments.

Many retirees have Medicare Part B premiums taken out of their Social Security checks. If that premium goes up too, the amount actually deposited may rise by less than the COLA alone suggests.

Why outlets disagree

The debate comes down to a question of fairness.

One view, reflected in CNN's framing, is that the COLA may not cover what retirees actually spend. Older people often put a bigger share of their money into things like healthcare and housing. Those costs can rise faster than the overall prices the CPI-W tracks.

The opposing view, argued in National Review's opinion piece, looks at the people paying for the program. Today's workers fund Social Security through payroll taxes. If retirees' raises outpace workers' wage growth, the writer argues, it isn't fair to younger taxpayers.

Both arguments tie into a long-running debate about which inflation measure Social Security should use, and about the program's long-term finances.

Why it matters for everyday people

If you get Social Security, the COLA is the main way your benefit keeps up with prices. Knowing how it's calculated can help you plan your budget for next year.

Background: the Social Security Administration has in recent years posted COLA notices online in personal my Social Security accounts, often before paper letters arrive. That may be the kind of early check AL.com describes.

If you're still working, this debate matters too. Choices about how benefits grow affect what the program costs and what you may get later.