Inflation cooled in June giving the Fed some breathing room to raise interest rates, but concerns remain about persistent price increases above policymakers’ 2% target. The lower inflation numbers also brought The Senior Citizens League’s prediction for the 2027 cost-of-living-adjustment increase down slightly to 3.8%.
This is still a full percent higher than the COLA increase for 2026 and would be the 17th highest since the Social Security Administration began the annual automatic boosts to Americans’ benefits in 1977. “A 3.8 percent COLA might sound like a lot compared to last year’s 2.8 percent, but it won’t be enough to make up the difference between what seniors bring in and what they need to live with dignity. And that’s the point of the program,” said Shannon Benton, executive director of TSCL in a statement.
2027 Social Security COLA effect on monthly benefits
Every Social Security beneficiary’s monthly amount depends on their own earnings situation during their career, so the 2027 COLA will affect each one differently. However, according to the TSCL the current average monthly benefit $2,026.41 would see a $77 increase under a 3.8% COLA. This would bump up the average payment to $2,103.41 per month.
The TSCL is concerned that this is not enough per month for the average senior to cover basic living expenses and rent for a 1-bedroom apartment, which the nonprofit calculates at roughly $2,700 per month.
The advocacy group for seniors notes that 44% of seniors depend entirely on Social Security for their retirement income in 2026, six points higher than last year.
“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,” points out Benton, lamenting, “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.”
How is the COLA calculated?
The SSA compares the average CPI-W for July, August, and September of the current year to the same period in the previous year. The percentage difference determines the COLA, which is applied to Social Security and Supplemental Security Income (SSI) payments starting in January of the following year.
Unfortunately for seniors, TSCL highlights that the COLA increase doesn’t fully fulfil its mission of keeping benefits in line with inflation. This is due to the use of the CPI-W to calculate the annual boost to benefits but this indicator doesn’t necessarily cover the household price increases that seniors experience.
The non-profits said in a 2026 report that the average Social Security payment has lost nearly 14% of its buying power since 2010. Furthermore, seniors have already had to deal with the effects of inflation over the year before they receive their first payment with the COLA boost seen in their January benefits.
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