Social Security’s latest cost-of-living adjustment estimate is fueling concerns that future benefit increases might fall short for retirees already struggling with elevated living costs.
Based on the latest Consumer Price Index (CPI) data, the Senior Citizens League (TSCL) now estimates that Social Security’s 2027 cost‑of‑living adjustment (COLA) will come in at 2.8 percent, unchanged from this year. If the projection holds, it would mean no meaningful boost in benefits despite ongoing pressure from rising housing, health care and everyday expenses.
“Americans are right to worry about our current COLA projection,” TSCL Executive Director Shannon Benton said in a statement. “The fact is that most senior households already get by on only about 58% as much income as their working-age counterparts, and you’d be hard-pressed to find a middle-class or working-class American who thinks the economy is doing well right now, especially as oil prices rise.”
Why It Matters
A projected 2.8 percent COLA for 2027 would leave seniors with no real improvement in purchasing power, as benefits would rise at the same rate as they did this year despite prices remaining significantly higher than they were before the COVID-19 pandemic.
For many retirees living on fixed incomes, even small differences in annual COLAs can have a major impact. Costs that disproportionately hit older Americans, such as housing, utilities, groceries and medical care, have not meaningfully returned to pre‑inflation levels, making a flat year‑over‑year increase more difficult to absorb.
What To Know
COLAs are designed to help Social Security benefits keep up with inflation, but the 2.8 percent forecast suggests retirees should not expect a significant increase next year.
According to TSCL, the estimate is based on the most recent CPI readings, which showed inflation remaining elevated but not accelerating enough to trigger a larger adjustment. The organization said the projected increase for 2027 currently matches the 2026 COLA, which went into effect in January.
“In general, a COLA staying the same is not a bad thing, as it more broadly signals inflation is becoming less of an issue,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “However, with many Americans facing an affordability crisis, COLA estimates may be financially sound but not completely capture the economic reality for many beneficiaries.”
In real terms, experts said that means seniors might continue to face a gap between benefit increases and actual household costs, particularly in high‑cost areas where rent, utilities and food prices remain stubbornly high.
“A COLA the same size of the previous year is bad news for retirees as roughly 40 percent of them rely solely on Social Security. Furthermore, inflation is likely higher in ’26 than ’25, so a COLA of the same size of the previous year would actually be negative,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “When the adjustment fails to keep up with real-world expenses, purchasing power continues to erode, even in a year where benefits technically increase.”
Senior advocates have long warned that Social Security COLAs frequently fail to reflect the real inflation experienced by older Americans, who spend a larger share of their income on medical care and housing.
“With every COLA increase, senior citizens fall just a little bit further behind,” Drew Powers, founder of Illinois-based Powers Financial Group, told Newsweek. “Seniors spend money on different things in different amounts than the general population, and the continued use of the CPI-W keeps the trend moving in the wrong direction.”
What Happens Next
While the official 2027 COLA will not be announced until October, early projections like TSCL’s offer a preview of what retirees might expect.
Social Security also faces a potential benefit cut of about 24 percent in 2032 unless Congress acts to fix the impending insolvency.
“Seniors tell us over and over that their benefits don’t go as far as they used to, and many younger people worry if the program will have atrophied to a shadow of its former self by the time they reach retirement age, even as taxes on their wages cover today’s benefits,” Benton said.
