Starting in January, the 55 million Social Security recipients will receive a 3.6 percent increase.
About eight million people who receive Supplemental Security Income, the disability program for the poor, also will receive the same increase.
The average monthly /*Social Security*/ payment of about $13,000 a year will increase by close to $500.
The increase was announced Wednesday when the government released a key measure of inflation, which determines whether people who receive Social Security get a cost-of-living adjustment, or COLA.
There was no adjustment in 2010 or 2011 because inflation was too low.
This year, Social Security will pay out $727 billion in benefits to retirees, disabled people, surviving spouses and children, the agency said.
The Associated Press contributed to this report.