Tens of millions of retirees will see their Social Security benefits increase by 3.6 percent under a cost-of-living adjustment (COLA) that goes into effect next year, the Social Security Administration (SSA) announced on Wednesday morning.

The new COLA will begin for the nearly 72 million Social Security recipients starting in January 2027, the agency said. The around 7 million people who receive Supplemental Security Income (SSI) will also receive a 3.6 percent increase, and it goes into effect on Dec. 31, 2026.

The adjustment translates to $75 extra per month, the SSA said in a news release.

“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability,” SSA Commissioner Frank J. Bisignano said in a statement published on Wednesday. “Under President Donald J. Trump, Social Security is delivering better, faster, higher-quality service for the American people.”

The 2027 COLA is the largest annual increase for Social Security and SSI recipients in four years. The adjustment factors in federal inflation metrics recorded by the Department of Labor in July, August, and September.

In 2023, a whopping 8.7 percent COLA for Social Security recipients went into effect due to surging inflation amid the COVID-19 pandemic. A year before that, a 5.9 percent COLA was imposed under similar pretexts.

Last year, the SSA announced a 2.8 percent COLA that went into effect for payments sent out throughout 2026.

Wednesday’s announcement came after the Labor Department announced earlier in the day that the Consumer Price Index (CPI), a closely monitored inflation metric, rose at an annual rate of 3.7 percent in September and was above expectations.

The COLA is designed to assist retired people and those with disabilities on fixed incomes to deal with rising prices of food, medicine, services, and other goods.

The COLA is specifically based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a metric under the broader CPI, reported by the Labor Department every month.

In an emailed news release to The Epoch Times on Wednesday in response to the announcement, the chief executive of the American Association of Retired Persons (AARP) said that “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.”

“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,” AARP Chief Executive Officer Myechia Minter-Jordan said in the statement.

Most older adults believe the COLA doesn’t adequately keep up with inflation, according to an AARP poll from September included in the news release. That poll found that about three-quarters of those 50 or older disagreed with the idea that a 3.5 percent COLA in 2027 would be enough to keep up with rising prices.

Other advocates for older Americans have argued that the COLA should be based on a separate CPI that is used for elderly people.

The Senior Citizen League, which releases COLA predictions every month, has often urged lawmakers to base the COLA on the Consumer Price Index for the Elderly (CPI-E) rather than the CPI-W.

According to the SSA, people with personal “my Social Security accounts” can evaluate their COLA notice online starting next month, or three weeks earlier than getting a paper notice sent in the mail.

The Associated Press contributed to this report.