Fresh inflation data is pointing to a larger Social Security cost-of-living adjustment for 2027, with current estimates clustering between 3.5% and 3.6%. If confirmed, that would mark the highest annual increase in three years for roughly 75 million Social Security and Supplemental Security Income beneficiaries.
Highlights
- Updated CPI data prompted Mary Johnson and The Senior Citizens League to forecast a 3.5% Social Security COLA for 2027, up from August's 3.4%.
- AARP raised its 2027 COLA estimate to 3.6%, predicting a $75 monthly benefit increase for average retired workers, compared to $67.90 for a 3.5% hike.
- The Social Security Administration will finalize the 2027 COLA in October after one more month of inflation data, with projections exceeding the 2.8% increase received in 2026.
Inflation data lifts 2027 adjustment outlook
As first reported by CNBC, updated forecasts based on the latest government consumer price index data now suggest the 2027 Social Security COLA could come in above this year's increase. Mary Johnson, an independent Social Security and Medicare policy analyst, estimates the adjustment may be 3.5%, up from her 3.4% projection in August.Johnson says the outlook may still shift with oil price volatility, which has had a significant effect on inflation since the war began. The official 2027 COLA calculation still requires one more month of government inflation data before the Social Security Administration makes its usual October announcement.
The Senior Citizens League now projects a 3.5% COLA, down from its previous 3.6% estimate. AARP, meanwhile, now forecasts a 3.6% increase, up from the 3.5% estimate it gave in August.
Benefit implications for retirees
A 3.5% adjustment would raise average monthly benefit checks by $67.90, according to The Senior Citizens League. A 3.6% COLA would increase the average retired worker's benefit by $75 per month, AARP says.In 2026, beneficiaries received a 2.8% increase, according to the Social Security Administration. Over the past decade, the COLA has ranged from 0% in 2016 to 8.7% in 2023, while averaging about 3.1% over the last 10 years, the agency said in October.
In our earlier coverage of the August U.S. Consumer Price Index (CPI) outlook, we explained that economists expected inflation to hold near 3.4% year over year, with energy and gasoline prices a key swing factor. We also noted that with the Fed’s policy meeting approaching, stubborn price pressures and solid employment were pushing market expectations toward a potential rate hike and keeping forecasts highly sensitive to incoming data.
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