We’re inching closer to the 2027 Social Security cost-of-living adjustment (COLA) announcement. Seniors, many of whom are already struggling to make ends meet, are anxiously awaiting news of how much their checks will increase next year.
The good news is that an above-average COLA seems increasingly likely. But there’s a hidden drawback to a large benefit boost that you’ll need to factor into your 2027 budget.
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The latest 2027 Social Security COLA projection is 3.8%
The Social Security Administration doesn’t issue predictions about where the COLA will end up, but The Senior Citizens League (TSCL), a nonpartisan senior group, does. Its projections tend to be fairly accurate, especially as we near the October announcement date.
TSCL recently updated its 2027 Social Security COLA estimate to 3.8%. This is down slightly from 3.9% the month before. However, it’s still well above the 2.8% it had predicted earlier in the year, before the war with Iran triggered skyrocketing energy costs.
A 3.8% increase may not feel like much, given that beneficiaries saw an 8.7% COLA in 2023, but it’s solidly above average compared to the last 50 years. It would add roughly $79 to the $2,081 average Social Security benefit as of April 2026.
It’s also possible that the 2027 COLA could wind up higher than expected. A lot depends on what happens over the next several months, and a larger COLA may not be the financial boon you were hoping for.
Where there’s a high COLA, there’s high inflation
Social Security COLAs are based on changes in average third-quarter inflation data. We can only speculate where the 2027 COLA will wind up right now, because the third quarter of 2026 hasn’t even started yet.
But looking at inflation trends over the past couple of months can give us clues about where we might be heading. The Consumer Price Index (CPI) report for May 2026 reveals that inflation has climbed to 4.2%, up from 3.8% in April. High energy costs continue to be the driving factor behind these high inflation rates.
If energy costs continue to rise over the coming months, or if we see other costs, like food, climb due to higher transportation costs, the 2027 COLA may come in higher than current estimates predict. But that doesn’t mean your financial situation will improve drastically.
The extra money will help cover some of your rising costs, rather than improving your standard of living. Some people may still find they need to rely more on other retirement income sources, despite the COLA.
Once the Social Security Administration officially announces the COLA in mid-October, you’ll be able to estimate how much your benefits will be next year. Then, you can figure out how much you’ll need to cover on your own in 2027.
