Social Security recipients are likely to receive a higher cost-of-living adjustment (COLA) for 2027 than what was given this year, based on recent estimates following the inflation data released for August.
The COLA is determined by the Bureau of Labor Statistics (BLS) using consumer price index (CPI) inflation data specifically for the months of July, August, and September. This particular calculation employs a version of the CPI known as CPI-W. For 2026, beneficiaries received a 2.8% increase in their payments due to this adjustment.
The latest CPI data from the BLS shows a 3.4% rise in consumer prices compared to last year, with the CPI-W reflecting a 3.5% increase over the same period.
Several organizations have provided varying estimates for the 2027 COLA using the recent data and projections for September, suggesting it will be between 3.4% and 3.6%.
The nonpartisan Committee for a Responsible Federal Budget (CRFB) has estimated a 3.4% COLA based on the latest figures.
Meanwhile, AARP has forecasted a 3.6% increase, drawing on its analysis of current inflation trends and future predictions.
Rich Johnson, who is AARP’s vice president for financial security, highlighted that many seniors depend heavily on Social Security for their income. He stressed that providing timely information about potential benefit increases can aid in their financial planning.
Johnson mentioned that AARP’s prediction incorporates inflation forecasts from the Federal Reserve Bank of Cleveland for September, noting that these estimates, while not guaranteed, contribute to a more accurate projection.
He also indicated that with only one month of inflation data left before finalizing the COLA, the uncertainty is diminishing. If prices don’t change too dramatically in September, it seems likely that the increase will fall within the mid-3% range.
The Senior Citizens League has predicted a 3.5% COLA based on the August CPI data, a slight reduction from its previous estimate of 3.6%. A 3.5% adjustment would raise the average benefit check by about $67.90, increasing it from approximately $1,940.08 to $2,007.98.
Shannon Benton, the executive director of TSCL, expressed concern about potential short-term economic shocks that could alter inflation in the upcoming month, affecting the final COLA announcement.
He also mentioned that regardless of whether the COLA ends up slightly higher or lower than expected, many seniors might be disappointed in the long run. This is mainly because their budgeting differs significantly from those still in the workforce, meaning they experience inflation differently. The CPI-W reflects the spending habits of urban wage earners, which may not accurately represent the financial realities faced by average seniors.
The last piece of data needed for the 2027 COLA will be released on October 14, when the BLS publishes the September CPI inflation data.
