Millions of Social Security beneficiaries will get a major new clue about their 2027 benefit increase in less than a week.
Fresh inflation data for the month of August will be released on September 11, and the figures will be the second-to-last piece of data needed to calculate next year’s Social Security cost-of-living adjustment (COLA).
While the official 2027 COLA will not be announced until October 14, experts say the September 11 update should provide one of the clearest indications yet of how large beneficiaries’ increase could be.
Personal Finance
Current projections from The Senior Citizens League (TSCL) place the 2027 COLA at approximately 3.6 percent, higher than the 2.8 percent adjustment retirees received for 2026.
Why It Matters
Social Security’s annual COLA affects more than 70 million Americans who receive retirement, disability, or Supplemental Security Income benefits.
The adjustment is designed to help benefits keep pace with inflation and preserve seniors’ purchasing power as consumer prices rise. For many retirees who depend heavily on monthly Social Security checks, even a small change in the COLA percentage can translate into hundreds of dollars over the course of a year.
What To Know
September 11 is when the Bureau of Labor Statistics is expected to release its August Consumer Price Index data.
Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Specifically, the Social Security Administration compares average third-quarter inflation data from one year to the next. July, August and September inflation figures are all required to complete the formula.
“Although prices for oil and other inputs rose in August, that does not necessarily mean inflation will come in higher than expected,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
“Although prices remain relatively high for diesel and retail gasoline, the cost to refine those inputs should come down as we transition to cheaper winter-grade fuel, potentially putting a cap on further price increases,” he added.
Because July’s data is already available, the release of August inflation figures will mean five of the six required data points are known. That should allow forecasters to generate a COLA estimate that is much closer to the final number than earlier projections.
If August inflation comes in hotter than expected, forecasts for the 2027 COLA could rise above the current 3.6 percent estimate. However, if inflation continues to cool, projections could move lower.
“August inflation is important because it is part of the three-month period used to calculate the Social Security COLA, along with September,” Thompson said. “Any upside surprise in inflation could push the COLA higher, while softer inflation could keep the increase relatively modest.”
Current 2027 COLA Projection
Source: The Senior Citizens League projections and Social Security administration data.
How Much Could a 3.6% COLA Mean?
While the final figure remains uncertain, a 3.6 percent increase would be noticeably larger than this year’s adjustment.
According to The Motley Fool, a 3.6 percent COLA would increase the average monthly retirement benefit of about $2,086 to approximately $2,161 per month, an increase of roughly $75 monthly before any Medicare premium deductions.
For beneficiaries, however, experts caution that a larger COLA is not necessarily a sign of improving financial conditions. Higher adjustments generally reflect higher inflation, meaning much of the additional money may be needed to cover rising costs and won’t actually improve retirees’ overall standard of living.
“With current predictions, it’s likely to be somewhere near to 3.6% unless energy and other prices move substantially in September,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“A larger adjustment than this year’s 2.8% sounds like good news, but seniors should remember that COLA is essentially reimbursement for inflation they have already experienced, and higher costs for everyday expenses can consume much of the additional money,” Beene added.
When Will the Official Social Security COLA Be Announced?
Beneficiaries will need to wait until October 14 for the official 2027 COLA announcement.
That date is when the September inflation data will be available, providing the final piece needed for the calculation. The Social Security Administration typically announces the annual COLA shortly after the inflation figures become available.
After the official announcement, beneficiaries can estimate their new payment amount by applying the COLA percentage to their current benefit. The Social Security Administration later sends personalized COLA notices, usually in December, detailing the exact monthly payments for the upcoming year.
However, Thompson said seniors may not be satisfied with their higher monthly benefit amount.
“Seniors are rarely satisfied with the COLA because many of the higher costs have already been absorbed during the prior year,” Thompson explained. “Even though you receive a COLA, those higher prices are often being felt today, not in the year when you actually receive the increase.”
What Happens Next
All eyes will now be on the August inflation report on September 11.
The data will provide the strongest indication yet of whether the projected 3.6 percent increase is likely to hold or move higher or lower before the official announcement next month.
“The end result will more than likely be beneficiaries being happy with the increase but remaining dissatisfied with what it actually buys,” Beene said.
Contact Newsweek editors on this story: Jason Lemon and Cristina Diciu.
