WASHINGTON (TNND) — Social Security beneficiaries might get a bigger cost-of-living adjustment next year than they did in 2026, but the final increase will not be determined until federal inflation data is released this fall.
The annual increase, known as the cost-of-living adjustment, or COLA, is designed to help Social Security and Supplemental Security Income (SSI) recipients keep pace with rising prices.
The Social Security Administration (SSA) calculates the adjustment using the average Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, for July, August, and September compared with the same three-month period a year earlier.
Throughout the last decade, the COLA increase has averaged about 3.1 percent. It was 2.8% in 2026 and 2.5 percent in 2025, according to the SSA.
Advocates for older Americans are currently projecting a 2027 COLA of about 3.8%, though the estimate could rise or fall depending on inflation data.
The adjustment is automatic and does not require congressional approval. Once the Labor Department releases September inflation data, the SSA typically announces the official COLA in October, with the higher payments taking effect in January.
While COLAs are intended to preserve retirees’ purchasing power, some advocates argue the formula does not fully reflect the spending patterns of older Americans, who often devote a larger share of their income to health care, housing, and prescription drugs. Others contend the annual increase remains an important safeguard against inflation, even if it does not offset every increase in living costs.
More than 74 million Americans receive Social Security or SSI benefits, according to the Social Security Administration. The agency notes that COLAs are designed to ensure that the purchasing power of those benefits is not eroded by inflation over time. Before automatic COLAs were enacted in 1975, benefit increases required acts of Congress.
