As things stand, experts expect the U.S.’s Social Security Administration (SSA) to enact the highest benefits hike in four years this fall, when the agency announces its latest annual cost-of-living adjustment (COLA).
However, the projected COLA – which would take effect in 2027 – would remain well below the largest such increase since the yearly adjustment was brought in half a century ago.
What is the COLA and how is it calculated?
Introduced in 1975, as part of a 1972 amendment to Congress’s Social Security Act, the COLA seeks to ensure that benefits issued by the SSA keep pace with the rate of inflation. The measure impacts monthly amounts paid out by the Social Security program – retirement, disability and survivor benefits – and the Supplemental Security Income (SSI) scheme.
Each year, the COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Compiled by the U.S.’s Bureau of Labor Statistics, the CPI-W measures price changes for goods and services such as housing, food and transportation. The SSA compares the CPI-W for July, August and September in the past and current years, and applies the percentage difference – if positive – as the COLA for the following year.
In fall 2025, the SSA’s comparison of CPI-W data led it to announce a 2.8% increase in this year’s Social Security and SSI benefits. At the start of 2026, retired workers, who account for the vast majority of Social Security recipients, received an average of $56 more per month in retirement benefits.
How much will the 2027 COLA be?
According to the latest projection issued by experts at the Senior Citizens’ League (TSCL), a major nonpartisan seniors group, the COLA for 2027 will be 3.6%. While down on TSCL’s previous predictions, it would be the largest increase since fall 2022, when surging post-covid inflation caused the SSA to enact an 8.7% COLA for benefits issued the following year.
The COLA for 2023 has only been topped three times, during a run of significant adjustments made over four decades ago. In a period when the U.S. experienced historic price rises, with inflation rocketing into the low teens, the SSA implemented COLAs of 9.9% and 11.2% for 1980 and 1982, either side of the agency’s largest ever annual adjustment: 14.3% in 1981.
When will the 2027 COLA be announced?
The SSA is due to confirm next year’s COLA on Wednesday, October 14, 2026. Social Security recipients will then receive their first adjusted payment in January 2027, while SSI beneficiaries’ increased checks will start on December 31, 2026. (These New Year’s Eve payments represent January 2027’s SSI benefits, but are to go out 24 hours early as New Year’s Day is a federal holiday.)
In TCSL’s announcement of its latest COLA projection, the group’s executive director, Shannon Benton, said this year’s “sharp swings” in inflation have made next year’s adjustment more challenging to predict. However, Benton noted that the organization’s forecasting system is equipped to deal with such ups and downs.
“One of the biggest wild cards in this year’s forecast has been inflation’s volatility,” Benton explained. “It started the year at 2.2%, then surged to 4.4% by May before falling back to 3.5% in June. That kind of instability can throw off forecasts, but our model is designed to avoid chasing every spike and dip, which has kept our predictions on a relatively steady course.”
At a glance – every annual COLA since 1975:
- 1975: 8.0%
- 1976: 6.4%
- 1977: 5.9%
- 1978: 6.5%
- 1979: 9.9%
- 1980: 14.3%
- 1981: 11.2%
- 1982: 7.4%
- 1983: 3.5%
- 1984: 3.5%
- 1985: 3.1%
- 1986: 1.3%
- 1987: 4.2%
- 1988: 4.0%
- 1989: 4.7%
- 1990: 5.4%
- 1991: 3.7%
- 1992: 3.0%
- 1993: 2.6%
- 1994: 2.8%
- 1995: 2.6%
- 1996: 2.9%
- 1997: 2.1%
- 1998: 1.3%
- 1999: 2.5%
- 2000: 3.5%
- 2001: 2.6%
- 2002: 1.4%
- 2003: 2.1%
- 2004: 2.7%
- 2005: 4.1%
- 2006: 3.3%
- 2007: 2.3%
- 2008: 5.8%
- 2009: 0.0%
- 2010: 0.0%
- 2011: 3.6%
- 2012: 1.7%
- 2013: 1.5%
- 2014: 1.7%
- 2015: 0.0%
- 2016: 0.3%
- 2017: 2.0%
- 2018: 2.8%
- 2019: 1.6%
- 2020: 1.3%
- 2021: 5.9%
- 2022: 8.7%
- 2023: 3.2%
- 2024: 2.5%
- 2025: 2.8%
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