The Social Security cost-of-living adjustment (COLA) for 2027 is projected to rise to 3.6%, based on the latest inflation data released Friday. This would mark the highest annual adjustment since 2023, pending the official calculation by the Social Security Administration (SSA) next month.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—the specific measure used to calculate COLA—increased 3.5% year-over-year in August, according to the Bureau of Labor Statistics. The SSA will use the average CPI-W from July, August, and September to determine the final COLA, with September’s data set to be released on October 14.
Current and Projected COLAs
- 2026 COLA: 2.8%
- 2025 COLA: 2.5%
- 2024 COLA: 3.2%
- 2023 COLA: 8.7%
The average retired worker currently receives $2,071 per month in benefits. A 3.6% COLA would increase this by approximately $75, raising the average monthly payment to $2,146 in 2027.
How the COLA is Calculated
The COLA is determined by the CPI-W, which tracks price changes for a specific basket of goods and services consumed by urban wage earners and clerical workers. Unlike the broader CPI-U (which rose 3.4% year-over-year in August), the CPI-W excludes certain spending categories more relevant to working-age populations, such as education and childcare.
Reactions from Advocacy Groups
Advocacy organizations have offered mixed perspectives on the projected increase. The AARP and Senior Citizens League both estimate a 3.6% COLA, aligning with the latest CPI-W data. However, the Senior Citizens League has cautioned that even a higher adjustment may not fully offset the financial strain on seniors.
"No matter if the COLA announcement comes in slightly higher or slightly lower than our prediction, seniors will probably end up disappointed in the long run," said Shannon Benton, executive director of the Senior Citizens League. "The reality is that older Americans allocate their budgets differently than people still in the workforce, so inflation hits them differently."
Factors Influencing the Final COLA
The final COLA figure remains subject to change based on September’s CPI-W data. Analysts note that volatile oil prices—a key driver of recent inflation—could still alter the outcome. The SSA’s official announcement is expected after the October 14 release of September’s inflation report.
Who Is Affected?
More than 75 million people receive Social Security or Supplemental Security Income (SSI) benefits. These payments are adjusted annually to help recipients keep pace with rising costs, though critics argue the current method does not adequately account for healthcare expenses, which disproportionately impact older Americans.
The SSA has not yet confirmed the final COLA, but the latest projections suggest a significant increase for 2027.