The cost-of-living adjustment (COLA) for Social Security benefits in 2027 will be 3.6%, the Social Security Administration announced on Wednesday. That works out to about an additional $75 a month for retired workers, from approximately $2,088 to $2,163.
The annual shift is based on year-over-year changes in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the prices of a broad range of goods and services.
To determine the COLA for the coming year, data from the third quarter of the current year is compared with the third quarter of the previous year.
Social Security's general benefit increases have been based on changes in the cost of living since 1975. The COLA was 2.8% in 2026, increasing the average monthly check by about $56.
While the adjustment is intended to offset inflation, Social Security is intended to be a safety net, not a full replacement of your pre-retirement income. With that in mind, here are key strategies to help you fund your post-work years.
How to fund retirement beyond Social Security
Max out your retirement contributions
No matter how far you are from collecting Social Security, maximizing contributions to your tax-advantaged retirement accounts will help strengthen your financial foundation.
For 2026, individuals can contribute up to $24,500 to a 401(k) and $7,500 to a traditional or Roth IRA. If you're 50 or older, you can take advantage of catch-up contributions, which tack on another $8,000 to 401(k) limits and another $1,100 to most IRAs.
If you're between 60 and 63 and your plan allows it, you can contribute an extra $11,250 rather than the $8,000 standard catch-up amount.
Guarantee income with annuities
Annuities, contracts with a life insurance company that can include guaranteed monthly income, are becoming increasingly popular among older Americans concerned about outliving their retirement savings. According to insurance trade association LIMRA, total U.S. annuity sales reached a record $464.1 billion in 2025.
Some annuities offer additional benefits, such as cost-of-living adjustments to offset inflation and increased payouts to cover long-term care.
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Make your savings work harder
1. Open a high-yield savings account or CD. You're not going to get rich putting all your money in an HYSA or a CD, but it's a safe and predictable strategy. If you're at or near retirement age, avoiding the stress of a market downturn should be a key objective.
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2. Explore bonds as a relatively safe bet. Bonds offer regular interest payments and have historically offered lower risks than the stock market. Pay close attention to ratings, though. Bonds with AAA ratings indicate very low default risk, whereas bonds with subpar ratings (BBB or lower) carry higher default risk.
3. Update your portfolio. The closer you get to retirement, the more you'll need to update your investments to adopt a lower-risk profile. While that doesn't mean abandoning the market entirely, it does require a heightened focus on dividend-paying stocks and conservative funds.
Look at your home equity
If you're a homeowner, you've probably accumulated a sizable chunk of equity, particularly after the surge in housing prices in the past five years.
Should you tap your home equity? Rather than selling, you could turn your equity into cash. Older homeowners may be eligible for a reverse mortgage to provide additional funds. Repayment isn't due until you sell, move out or pass away, but you have to keep up with property taxes, insurance and overall maintenance.
Can you downsize? A two-story house requires a lot of upkeep. Moving into a smaller condo would minimize maintenance while giving you access to cash.
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Keep working
In most cases, the longer you wait to collect Social Security, the more you stand to gain. While the full retirement age for anyone born after 1960 is 67 years old, if you wait until you're 70, you could qualify for about 124% of your total retirement benefit. (That higher amount will include any future COLAs, as well.)
If you want (or need) to keep working, waiting until at least full retirement age to collect has its benefits. The earliest you can collect Social Security is 62, but in 2026, the income cap is $24,480 a year. After that, you'll sacrifice $1 of your benefit check for every $2 you earn above the maximum.
Once you hit full retirement age, though, you can earn any amount and still receive your full Social Security benefits.
Benefit checks will reflect the Social Security COLA starting in January 2027.
- If you were born between the 1st and the 10th of the month, you should see the COLA in the check that arrives on Jan. 13, 2027.
- If you were born between the 11th and 20th of the month, expect it on Jan. 20, 2027.
- If you were born between January 21st and the end of the month, the first new check should arrive on Jan. 27, 2027.
Some recipients will receive the increase sooner:
- If you start receiving Social Security benefits before May 1997, your first check of the year would normally arrive on Jan. 3, 2027. Since Jan. 3 is a Sunday, however, that payment should arrive Dec. 31, 2026.
- If you receive Supplemental Security Income (SSI), those benefits are typically paid on the first of the month. Since New Year's Day is a federal holiday, those checks will also be distributed on Dec. 31, 2026.
The full calendar of Social Security payment dates is available online.
Social Security FAQs
How is the Social Security COLA calculated?
To determine the annual change, the agency compares the Consumer Price Index for Urban Wage Earners and Clerical Workers for the third quarter of the current year with that for the third quarter of the previous year. (In this case, the difference between July-September 2025 and July-September 2026).
Will Social Security run out?
The Social Security trust funds have been operating at a deficit since 2021, requiring trustees to draw on reserves to meet its obligations. According to the 2026 trustees' report, those reserves will be depleted in 2033. Without congressional action, the fund will then be able to pay retirees only about 77% of their earned benefits.
When can I begin collecting Social Security?
You can begin collecting Social Security at age 62, although you won't get your full benefits until you reach full retirement age (FRA).
For individuals born in 1960 or later, the FRA is 67. Thanks to delayed retirement credits, if you wait until after then, your payments increase by about 8% per year until they max out at 70.
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