Social Security payments could potentially increase by 3.7% or 3.8% for 2027 – though next year’s benefit rates will not be set until mid-fall.
Several projections released this week offer a range of cost-of-living adjustments. Some analysts shared a potential adjustment of 3.7%, but the Senior Citizens League this week also released its latest COLA projection with a predicted 3.8% increase.
How much would a 3.7% or 3.8% COLA mean for Social Security recipients?
A Social Security COLA of 3.7% would increase an average benefit of $2,000 by $74 per month, said Mary Johnson, a Social Security and Medicare analyst who tracks and calculates the COLA estimate. A 3.8% COLA bump would increase an average benefit of $2,000 by $76 per month – just $2 more per month
A cost-of-living adjustment of 3.7% is down a full percentage point from last month’s estimate as inflation cooled in June, mostly because of lower gasoline prices, while a potential COLA adjust of 3.8% a slightly smaller month-to-month estimate decrease. Overall annual consumer prices rose 3.5% in June, down from 4.2% in May. The core rate, excluding the volatile energy and food sectors, was at 2.6%.
How is final COLA calculated and when will it be announced?
The Social Security Administration bases its COLA each year on average annual increases in the consumer price index for urban wage earners and clerical workers (CPI-W) from July through September. However, “these monthly check-ins can give a glimpse of what the actual inflation data indicates for the third quarter, and that can be useful in making retirement financial decisions such as renewing a CD or budgeting,” Johnson said.
The index for urban wage earners largely reflects the broad index the Labor Department releases each month, although it sometimes differs slightly. Last month, the overall consumer price index rose 3.5% and the index for urban wage earners happened to increase by the same amount.
The cost-of-living adjustment for the next calendar year is typically finalized in October.
What was the Social Security COLA increase for 2026?
The Social Security Administration (SSA) in October announced that a 2.8% COLA would be heading beneficiaries’ way in 2026.
The 2026 increase is nothing close to the dramatic 8.7% COLA jolt for 2023 Social Security payments. But it is better than the increase that beneficiaries saw in 2025, when more than 72.5 million people received a 2.5% COLA increase for their Social Security and Supplemental Security Income benefits.
If a 3.7% or 3.8% COLA increase would be set this fall for 2027 payments, either would be the largest since the 8.7% increase, which was the largest annual COLA increase in the last decade.
Contributing: USA Today Network
This article originally appeared on Rockland/Westchester Journal News: Social Security benefits may see a 3.8 percent boost
