Social Security’s 2027 cost-of-living adjustment, or COLA, won’t be announced until October 2026. And there’s a reason for that.
Social Security COLAs are based on third-quarter readings from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. When there’s a rise in the CPI-W from one year to the next, benefits become eligible for a boost. But since we won’t have a complete set of third-quarter data until October, the Social Security Administration (SSA) won’t be able to confirm an official COLA until then.
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Still, there are some early clues as to what next year’s COLA might look like. Independent Social Security analyst Mary Johnson estimates that next year’s COLA will be 3.4%. The Senior Citizens League, an advocacy group, meanwhile, thinks next year’s COLA will be 3.6%.
Since these estimates are fairly similar, it’s fair to assume that they may end up being pretty accurate if inflation doesn’t shift heavily in August and September. And if that’s the case, it could set the stage for a nice boost to the typical senior’s monthly Social Security check.
How much might the typical Social Security benefit rise?
It’s important to recognize that the projections above are just that — projections. However, if inflation holds steady, either number could come to be.
Meanwhile, the average monthly Social Security benefit for retirees as of July 2026 is about $2,086. If we use Johnson’s 3.4% COLA estimate, that means the average Social Security check could rise by about $71 in 2027. If we use the 3.6% from the Senior Citizens League, it boosts the average Social Security check by $75.
Either increase would be far more substantial than the typical increase in 2026, since benefits received only a 2.8% COLA this past January.
There’s another piece of the puzzle missing
It’s too soon to know how much the average Social Security benefit will increase in 2027 for two reasons. First, we don’t have an official COLA. Second, even once that number comes in, seniors on Medicare will need to account for potential Part B premium hikes before calculating their net raises.
For people enrolled in Social Security and Medicare at the same time, Part B premiums are paid out of Social Security checks directly. So if there’s a big increase in the cost of Part B, it could lead to a smaller raise.
This year, the cost of Medicare Part B rose $17.90 from 2025’s cost. Now, let’s say next year’s COLA comes in at 3.6%, thereby boosting the typical Social Security benefit by $75. If the cost of Part B increases by $18, it’ll whittle that $75 increase down to $57 for Medicare enrollees.
Stay tuned for more information
The SSA is expected to announce 2027’s COLA officially on Oct. 14, provided there’s no delay in September’s CPI-W data (as there was last year due to the government shutdown). But even once a COLA is announced, it may be too soon to calculate the typical net benefit increase because we may not know yet how much Medicare Part B will cost.
Last year’s Part B increase, for example, was not announced until mid-October. So it could be weeks after the COLA announcement until seniors are able to get the full picture.
For now, anyone looking to establish a budget for the new year should err on the side of caution. That means assuming 2027’s Social Security COLA will end up on the lower side and that the cost of Part B will increase substantially.
Assuming the worst on both fronts could mean underestimating how much your benefits will rise. But if you’re able to get by on that smaller number and your net COLA comes in higher, you’ll be in that much better a position.
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If the Latest Social Security COLA Forecasts Are Correct, Here’s How Much the Average Benefit Will Rise in 2027 was originally published by The Motley Fool
