By Jessica Hall
Next year’s adjustment will come in the wake of the Iran war and rising costs for everyday expenses such as gas, healthcare and housing
A total of 44% of older Americans depend on Social Security for all of their income, according to the Senior Citizens League.
The Social Security cost-of-living adjustment could be 4.7% in 2027 – up from 2.8% this year – with inflation now at the highest level in three years.
That would make for the biggest COLA since 2023, when the hike was 8.7%.
Mary Johnson, an independent Social Security and Medicare analyst, has forecast next year’s COLA to be 4.7% – or even higher – in the wake of the Iran war and rising costs for everyday expenses such as gas, healthcare and housing.
“This is hard to quantify as it hits consumers now, but it clearly is causing enormous cost pressures, [and it’s] especially difficult for low-income and older Americans living on fixed incomes,” Johnson said.
The Senior Citizens League, an advocacy group for older adults, has forecast that the COLA will be 3.8% in 2027. Social Security currently pays the average retiree about $2,026 per month. A 3.8% increase would bring that average to $2,103, while 4.7 % COLA would bring it to $2,121.
The forecasts come as the rate of inflation climbed to a three-year peak of 4.2% in May.
COLA is not a raise but an adjustment to ensure benefits keep pace with inflation. The adjustment is announced in October and is determined by inflation in the third quarter of the year – July, August and September – so the forecasts will likely continue to fluctuate before the official announcement.
Social Security is crucial to the finances of older adults, with 44% of older Americans depending on Social Security for all of their income, up from 39% in 2025, according to the Senior Citizens League.
More than half of seniors (57%) survive on less than $2,000 a month, while 13% get by on less than $1,000, which places an estimated 5.6 million older adults below the federal poverty line, according to a survey from the Senior Citizens League.
The average Social Security payment also falls short of what it costs to live in the U.S., the group said. Factoring in rent for a one-bedroom apartment and basic living expenses, the average cost of living for one senior is about $2,700 per month, the Senior Citizens League said.
“We’re seeing inflation on the rise when more than half of seniors already can’t afford basic living standards. We’re talking about food, a roof over their head, and transportation. Many seniors already have to skip doctor’s appointments due to costs, which costs all of us more in the long run when we swap preventative care for emergency care,” said Shannon Benton, the executive director of the Senior Citizens League.
Social Security itself is facing a financial crisis: The trust fund that backs the program will be insolvent in 2032, at which point retirees would receive only 78% of their benefits unless Congress acts to shore up the system.
-Jessica Hall
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06-10-26 1100ET
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