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The Senior Citizens League on Tuesday kept its estimate for the 2027 Social Security cost-of-living adjustment at 3.8%, saying average monthly benefits would rise by about $74 if that projection ultimately becomes official. The group also renewed its support for legislation that would change how annual benefit increases are calculated and extend the program’s long-term finances.
A cost-of-living adjustment, or COLA, is the annual increase applied to Social Security benefits to help retirees keep pace with inflation. The Social Security Administration calculates the adjustment using inflation data, with the official 2027 COLA expected to be announced in October.
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Cooler Inflation Tempers COLA Expectations
TSCL said its latest estimate remains unchanged from last month and would increase the average monthly Social Security benefit from $1,937.53 to about $2,011.15.
The U.S. Bureau of Labor Statistics reported Tuesday that the Consumer Price Index rose 3.5% year over year in June. The lower-than-expected inflation reading reflected declines in energy prices, helping ease expectations for a larger Social Security cost-of-living adjustment.
Separately, independent Social Security and Medicare analyst Mary Johnson lowered her 2027 COLA estimate to 3.7% from 4.7% last month. “This is a significant drop in inflation, and one that we’ve rarely seen in the June CPI data over the past five years,” Johnson said in a statement, according to CNBC.
TSCL had raised its 2027 COLA projection to 3.9% in May from 2.8% as inflation accelerated, warning that rising healthcare, housing, utility and grocery costs continued to erode retirees’ purchasing power. The latest estimate represents a modest pullback as inflation pressures have eased.
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Congress Revisits Social Security Reform
Alongside its monthly COLA update, TSCL highlighted the reintroduction of the Social Security 2100 Act.
According to the organization, the legislation would increase benefits by 2%, raise the minimum benefit to 125% of the federal poverty level, switch future COLA calculations to the Consumer Price Index for the Elderly, or CPI-E, and apply Social Security payroll taxes to earnings above $400,000. TSCL said the proposal would extend the program’s trust fund by roughly 32 years.
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“The bill is the gold standard for Social Security reform and accomplishes the majority of changes older Americans want to see for the program,” TSCL Executive Director Shannon Benton told CNBC.
Benton also urged lawmakers to act before the projected trust fund shortfall later this decade.
“Right now, we have a golden opportunity to act,” Benton said. “Congress will almost certainly have to pass a bill to address the program’s finances in the next few years, which provides a perfect chance to simultaneously shore up benefits for the next 100 years and continue the program’s legacy.”
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Rising Costs Still Challenge Retirees
While a higher COLA helps offset inflation, TSCL has consistently argued that many retirees continue to lose purchasing power as healthcare, housing, utility and grocery costs rise faster than overall inflation.
Meanwhile, Medicare beneficiaries could also face higher healthcare costs next year. The latest Medicare trustees report projects the standard Medicare Part B premium to increase to $209.50 per month in 2027 from $202.90 in 2026. Johnson said the projected increase remains relatively modest compared with historical averages
The official 2027 Social Security COLA will be announced by the Social Security Administration in October after third-quarter inflation data becomes available.
Image via Shutterstock
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