KEY TAKEAWAYS
- The 2027 Social Security cost-of-living adjustment (COLA) is estimated at 3.6%.
- A softer inflation picture nudged the estimate down from last month’s projections.
- The official COLA will be announced in October, based on inflation data from July through September.
The countdown to the next cost-of-living adjustment (COLA) announcement is winding down, and the boost could be bigger than any since 2022.
The 2027 COLA is expected to be 3.6%, up 0.8 percentage points from this year’s increase, according to the most recent estimate from The Senior Citizens League (TSCL), an advocacy group. The average beneficiary would receive about $69.75 more monthly. AARP, which began publishing its own COLA forecasts this year, projects a slightly smaller increase of 3.5%.
Why This Matters
About 75.7 million Americans receive Social Security benefits. Knowing next year’s benefit amount helps retirees plan their budgets and see whether Social Security is keeping pace with rising costs.
These are still estimates, based on the available inflation data. The Social Security Administration will announce the official COLA on Oct. 14, after September inflation data is released.
The estimated 3.6% COLA is smaller than last month’s 3.8% projection from TSCL. However, this boost would still be the biggest since the 2022 COLA announcement for benefits that went out the following year.
The Social Security Administration calculates the COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The CPI-W slowed somewhat in July, in part due to a lull in the Iran war. But gas prices rose again this month as the conflict heated up.
Forecasters expect U.S. inflation to ease in the coming months as airfares and hotel prices decline following the World Cup’s end in mid-July.
Inflation reports for the summer are the most important for beneficiaries. To calculate the COLA, the SSA compares average third-quarter (July through September) CPI-W readings against the same period a year earlier.
