Experts have revised their estimates for the 2027 Social Security cost-of-living adjustment (COLA), projecting a range of 3.7% to 3.8% due to cooling inflation. This marks a significant decline from earlier projections, which had anticipated a higher increase. The latest estimates come after the June Consumer Price Index (CPI) report, which showed a 3.5% annual increase, down from 4.2% in May. The drop in inflation was driven primarily by lower energy prices, particularly gasoline.
Mary Johnson, an independent Social Security and Medicare analyst, initially estimated a 4.7% COLA last month but revised it downward to 3.7% following the June CPI data. Johnson noted that such a sharp decline in June inflation is rare over the past five years. Meanwhile, the Senior Citizens League, a nonpartisan senior advocacy group, maintained its estimate of 3.8%, unchanged from its previous projection. The AARP estimates a 3.6% COLA, while the Social Security Administration (SSA) will announce the official figure in October after analyzing inflation data from July through September.
Impact on Benefits
A 3.7% COLA would increase the average monthly benefit of $2,000 by $74, according to Johnson. The 2026 COLA was 2.8%, raising the average retired worker's check by about $56 per month. A 3.7% increase would be the largest since 2022, when the COLA was 8.7% amid the highest inflation in 40 years.
Medicare and Retirement Concerns
Despite the COLA increase, experts warn that rising Medicare premiums and drug costs may offset much of the benefit boost. The Employee Benefit Research Institute (EBRI) found that retirement confidence among retirees fell 5 percentage points to 73% in a January survey. Seniors also report that Social Security benefits have lost nearly 14% of their buying power over the past decade due to inflation outpacing COLA adjustments.
Uncertainty Ahead
Analysts caution that inflation trends remain unstable, and future COLA estimates could shift based on upcoming CPI reports. The SSA will announce the official 2027 COLA on October 14, following the release of the September CPI data.