If you collect Social Security, you may be painfully aware that this year’s 2.8% cost-of-living adjustment (COLA) isn’t cutting it. Inflation has been soaring since the Middle East conflict erupted. And now, your monthly benefits may not be keeping up with your costs.
That’s the unfortunate thing about Social Security COLAs. Even though they’re meant to help benefits keep pace with inflation, they’re backward-facing.
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In other words, COLAs are based on previous inflation readings, not future inflation. So it’s easy to end up in a situation where a COLA comes through but doesn’t end up being enough to keep up with rising costs.
If your Social Security benefits aren’t getting you very far today, you may be hoping for a larger raise in 2027. And the good news is that current estimates do seem to point to a larger COLA in the new year.
But you’re going to have to wait a while before the Social Security Administration (SSA) is able to make that official.
What current COLA projections look like
Thanks to a recent surge in inflation, the Senior Citizens League, an advocacy group, now projects that 2027’s Social Security COLA will be 3.8%. But Mary Johnson, an independent Social Security analyst, thinks retirees will be in line for a 4.7% COLA in 2027.
At this point, it’s too soon to know who’s correct. And the reality is that both projections could end up being off base.
Social Security COLAs are based on third-quarter inflation readings from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Since it’s only July, those readings aren’t available yet, which means any COLA estimate that gets published is merely a guess.
Granted, it’s a guess based on actual data. But it’s a guess nonetheless.
When to tune in for the big announcement
CPI-W data for the month of September is expected to be released on Oct. 14. As such, that’s the day to be on alert for a big announcement from the SSA. Once that data is available, the SSA can share an official COLA for 2027.
You can go to the SSA’s website and look for a COLA announcement, at which time the agency will typically announce other key program changes for 2027. Those usually include a new maximum monthly benefit and an earnings test limit.
Of course, in the interim, it’s OK to watch for COLA guidance. But know that any number you see is really just a forecast and nothing more. You’ll need to wait until October to get a firm idea of how much your Social Security checks should go up in the new year.
