WASHINGTON (TNND) — Social Security recipients are on track for a potentially larger cost-of-living adjustment in 2027, although the latest estimates could shift as two more months of inflation data come into focus.
Current projections put the 2027 Social Security cost-of-living adjustment, or COLA, between 3.2% and 3.6%. Any increase in that range would top the 2.8% adjustment beneficiaries received for 2026.
The annual COLA is designed to help Social Security benefits keep pace with rising consumer costs. It is calculated using third-quarter inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W.
The Social Security Administration compares the average CPI-W reading for July, August and September with the average from the same three-month period a year earlier. That means July’s inflation report provides the first piece of the calculation, but August and September data will determine the final increase.
Consumer prices rose 3.4% in July from a year earlier, according to the Bureau of Labor Statistics, easing from a 3.5% annual increase in June.
With two months of data still to come, several organizations are offering different estimates for what beneficiaries could receive next year.
The Committee for a Responsible Federal Budget projects a 3.2% COLA for 2027, at the low end of the current range. The nonpartisan group noted that the CPI-W was unchanged in July and was up 3.4% from a year earlier.
A larger COLA can provide additional financial support for retirees and other Social Security recipients, but it also increases the amount paid out by a program facing long-term financing challenges. CRFB has proposed changes to the COLA formula as part of broader efforts to improve Social Security’s finances, including potentially limiting adjustments for higher-income beneficiaries.
AARP is projecting a somewhat larger increase of 3.5%. The organization said its estimate is intended to give beneficiaries an early indication of how their payments could change before all of the third-quarter inflation figures are available.
AARP Vice President for Financial Security Rich Johnson cautioned that the projection could still move, particularly because food and energy prices could affect inflation over the remaining two months used in the calculation.
The Senior Citizens League has the highest estimate among the three groups, forecasting a 3.6% COLA for 2027.
At that level, the organization estimates an average Social Security benefit of $1,937.53 would increase by $69.75 a month to $2,007.28.
The Senior Citizens League said shifting inflation trends have made forecasting this year’s adjustment more difficult. Executive Director Shannon Benton pointed to the volatility in inflation during 2026, saying the group’s forecasting model is designed to avoid reacting too strongly to individual monthly swings.
For beneficiaries, the key figures will now be the CPI-W readings for August and September. Because the COLA is based on the average for the full third quarter, the current estimates are not guaranteed.
The official 2027 Social Security COLA is expected to be announced Oct. 14 following the release of September inflation data. The adjustment will take effect with benefits paid in January 2027.
