(NEXSTAR) – Following a drop in inflation last month, a projected estimate for the impending Cost of Living Adjustment (COLA) for Social Security recipients has declined slightly.
The latest data from the Bureau of Labor Statistics shows the consumer price index increased by 0.1 percent last month, with the annual inflation rate dropping to 3.4 percent.
In its own update Wednesday, The Senior Citizens League cut its COLA prediction from the 3.8 percent increase it projected last month to 3.6 percent. It’s still roughly in line with the estimates TSCL has released all year: 3.9 percent in April, 3.8 percent in May and 3.8 percent in June.
“One of the biggest wild cards in this year’s forecast has been inflation’s volatility,” TSCL Executive Director Shannon Benton said in a press release. “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.”
Despite its dip, a 3.6 percent increase is still well above the 2.8 percent Social Security recipients received this year. It would raise the average benefits by almost $70 to $2,007.28 a month.
The true COLA increase for 2027 is not expected to be released until October. TSCL said that if its prediction comes to fruition, next year’s COLA could be the highest since 2023’s 8.7 percent increase.
TSCL bases its projections on the same metrics used by the Social Security Administration to calculate the annual COLA for retired beneficiaries. But the group has long argued that this data (i.e., the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners, which itself is a measure of the change in prices for common consumer goods and services) does not take into account the costs that elderly Americans are paying for things like medicine, housing and groceries.
TSCL has long pushed for Congress to overhaul the method for calculating COLAs, calling instead for a system based on the Consumer Price Index for the Elderly (CPI-E) — which is “specifically based on the spending patterns of Americans 62 years of age and older,” the Bureau of Labor Statistics says.
Congress has reintroduced the Social Security 2100 Act, which would use the CPI-E to calculate COLA changes, but TSCL says the bill’s future is grim. Both the House and Senate versions of the bill have been referred to committees.
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