Social Security beneficiaries are expected to receive a larger cost-of-living adjustment (COLA) in 2027 compared to the increase received for 2026, according to new estimates following the release of August inflation data from the Bureau of Labor Statistics (BLS) [1]. The COLA for 2026 was a 2.8% increase, but recent inflation readings suggest a higher adjustment for 2027 [1]. The BLS reported that consumer prices rose 3.4% year-over-year in August, with the CPI-W, the index used to calculate COLA, up 3.5% over the same period [1].
Multiple organizations have released projections for the 2027 COLA based on the latest data and estimates for September. The Committee for a Responsible Federal Budget (CRFB) estimated a 3.4% COLA, while AARP projected a 3.6% increase, incorporating the Federal Reserve Bank of Cleveland's inflation projections for September [1]. The Senior Citizens League (TSCL) predicted a 3.5% COLA, a slight decrease from its previous estimate of 3.6% [1]. According to TSCL, a 3.5% COLA would raise the average monthly benefit from $1,940.08 to $2,007.98, an increase of $67.90 [1].
Rich Johnson, vice president of financial security at the AARP Public Policy Institute, emphasized the importance of these estimates for older adults who rely on Social Security for the majority of their income, noting that early projections help beneficiaries plan their finances [1]. Johnson also stated that with only one month of inflation data remaining before the 2027 COLA is finalized, there is less uncertainty, and unless there is a dramatic change in September prices, the COLA is expected to be in the mid-3% range [1].
TSCL executive director Shannon Benton highlighted the potential for short-term economic shocks to impact the final COLA figure, but also cautioned that regardless of the final number, seniors may still feel disappointed due to ongoing budget pressures from rising prices [1].
CONCLUSION
Estimates suggest Social Security recipients will see a higher COLA in 2027, likely in the mid-3% range, driven by recent inflation data. While this adjustment may provide some relief, experts note that many seniors continue to face financial pressures from rising costs, and the final adjustment will depend on September's inflation figures.