For the millions of Americans relying on Social Security benefits to make ends meet, annual cost of living adjustment increases serve as a lifeline to help retirees stay afloat and keep in step with inflation.
Using the same methodology as the Social Security Administration, the nonpartisan senior advocacy group The Senior Citizens League estimates a 3.8% increase in 2027.
“The Social Security Act specifies a formula for determining each COLA,” the Social Security Administration said in statement.
“According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.”
According to TCSL, the predicted 2027 increase would rank the 17th highest COLA since 1977.
It would also be the highest increase for seniors in years — though still a far cry from the 8.7% announced in 2023.
In 2026, retirees and Supplemental Security Income recipients saw a 2.8% COLA increase — about $56 more a month.
Left behind: Seniors’ real-life expenses outpace COLA increases
TCSL reports many seniors feel left behind by COLA increases, and that the adjustments only account for inflation but not seniors’ budgeting reality.
“A lot of it has to do with the economic indicator the government uses to calculate the COLA,” TCSL said. “The problem is that the CPI-W measures changes in prices for urban wage earners, whose budgets look a lot different than a typical senior’s.”
The Consumer Price Index for the Elderly shows seniors spend more of their budgets on housing and medical care than people who live in cities and earn their income by working.
Medicare costs largely offset COLA
Although Social Security checks increased in 2026, so did healthcare costs — biting a big chunk out of seniors’ COLA increase.
Among the increases was the standard monthly premium for Medicare, which often comes directly out of Social Security payments.
The standard premium for Medicare Part B increased from $185 per month to $202.90 — nearly $18.
The Part B deductible, which is what you pay before benefits kick in, also increased by $26.
According to Investopedia, what looked like a “monthly boost,” in COLA shrunk to about $39 after accounting for changes in the standard monthly premium.
