Social Security sets its 2027 COLA increase at 3.6%. Here

More than 75 million Americans will get a 3.6% boost to their monthly Social Security benefits next year, due to a cost-of-living adjustment announced Wednesday by the Social Security Administration.

Starting in January, next year's COLA will increase the average Social Security payment by roughly $75 to $2,170 a month, the Social Security Administration said.

The Labor Department said Wednesday that the Consumer Price Index, a closely watched inflation gauge, rose at an annual rate of 3.7% in September.

"While a 3.6% COLA is certainly welcome, it wouldn't necessarily restore the purchasing power seniors have already lost," Shannon Benton, executive director of the advocacy group Senior Citizens League, told CBS News. "The COLAs are designed to keep pace with inflation, not make up for years of falling behind."

About 7.3 million people who receive Supplemental Security Income will see the new COLA reflected starting on Dec. 31, 2026, the agency said.

"People are getting crushed by prices," Altman said in an email. "As important as the Social Security COLA is, it is not keeping up with prices."

Each fall, the Social Security Administration announces its inflation adjustment based on a metric known as the "Consumer Price Index for Urban Wage Earners and Clerical Workers," or CPI-W, which tracks the average change in prices paid by workers for a basket of commonly purchased goods and services.

The COLA is based on that inflation data from July through September. However, some advocates for senior citizens say that the CPI-W doesn't accurately reflect spending by older Americans, who tend to spend more on healthcare than younger people. Those costs have tended to rise faster than overall inflation.

"We favor the adoption of the CPI-E (Consumer Price Index for the Elderly), which calculates the impact of inflation on seniors' true living costs," Max Richtman, president of the National Committee to Preserve Social Security and Medicare, told CBS News.

"Without adopting a more adequate COLA formula, seniors likely will continue to tread water or fall behind rather than 'catch up,'" Richtman said.

Social Security is the largest antipoverty program in the U.S., the Census Bureau said last month. However, the poverty rate among seniors has been inching higher for several years, rising to 15.4% last year from 14.2% in 2022, according to government data. Experts attribute that increase partly to issues such as rising healthcare costs, lagging Social Security benefits and insufficient retirement savings.

"There's a lot on the line financially right now for older Americans: 1 in 5 have no retirement savings, and more people feel financially insecure this year than last," AARP CEO Myechia Minter-Jordan said in a statement on Wednesday.