Social Security Recipients May See Larger Benefit Boost in 2027
New estimates suggest a cost-of-living adjustment between 3.4% and 3.6% for Social Security beneficiaries next year, following August inflation data.
Social Security beneficiaries are projected to receive a more substantial cost-of-living adjustment (COLA) in 2027 compared to the increase for the current year. These updated estimates are based on the latest inflation data released for August.
The annual Social Security COLA is legally determined by the Bureau of Labor Statistics' (BLS) consumer price index (CPI) inflation data, specifically using a variant known as CPI-W, recorded over the months of July, August, and September. This adjustment is intended to help beneficiaries' payments keep pace with the rising cost of living. For 2026, the COLA represented a 2.8% increase.
Recent reports indicate that consumer prices rose by 3.4% from a year ago as of August, with the CPI-W showing a 3.5% increase over the same period. Based on this data and projections for September's figures, various organizations have estimated the 2027 COLA to fall within a range of 3.4% to 3.6%.
The Committee for a Responsible Federal Budget (CRFB), a nonpartisan organization, estimates the 2027 COLA will be 3.4%, citing the latest available data. The AARP has projected a 3.6% COLA, based on its analysis of recent inflation trends and upcoming projections.
Rich Johnson, vice president of financial security at the AARP Public Policy Institute, highlighted the significant reliance of many older adults on Social Security for their primary income. He noted that AARP's forecast is designed to assist beneficiaries in financial planning. "Family budgets have been under increasing pressure because of rising prices. The sooner that we can give them reliable information as to how much their benefits might [increase next year], the sooner they can start planning," Johnson stated.
Johnson further explained that AARP's estimate incorporates inflation projections from the Federal Reserve Bank of Cleveland for September. While acknowledging these are not definitive, he expressed confidence that "unless prices change dramatically in September, we’re confident that the COLA will be in the mid-3% range."
The Senior Citizens League (TSCL) predicted a 3.5% COLA following the August CPI inflation data, a slight decrease from its previous 3.6% estimate. According to TSCL, a 3.5% COLA would translate to an approximate $67.90 increase in average monthly benefit checks, raising them from $1,940.08 to $2,007.98.
Shannon Benton, executive director of TSCL, stated that the organization is monitoring for any short-term economic shocks that could significantly alter inflation figures in the remaining month before the final COLA announcement. Benton also expressed concern that the CPI-W might not fully capture the spending patterns of seniors, noting that "older Americans allocate their budgets differently than people still in the workforce, so inflation hits them differently. The CPI-W captures the experience of urban wage earners, which doesn’t represent the average senior’s budget."
The final data point for determining the 2027 COLA will be released on October 14, when the BLS publishes the September CPI inflation data.