Good news for Social Security recipients? 2027 COLA could see 3.5% to 3.6% increase, groups estimate | Today’s news
Millions of Americans who rely on Social Security payments can likely expect an increase in their monthly benefits in 2027, as the cost-of-living adjustment (COLA) could be around 3.5 percent to 3.6 percent, which could be the highest in three years.
CNBC reported the new estimate on Friday (local time), citing Mary Johnson, an independent policy analyst for Social Security and Health Care. Johnson said the Social Security COLA for 2027 could be 3.5 percent, based on the latest consumer price index (CPI) data released Friday. She added that how the estimated COLA changes will depend on volatile oil prices, which have had a significant impact on inflation since the start of the US-Iran war in late February.
In early August, Johnson estimated the COLA could be 3.4 percent.
How much could the monthly benefits increase? Here’s what the groups are projecting
By contrast, the Senior Citizens League cut the projected Social Security COLA for 2027 to 3.5 percent, down from the 3.6 percent estimate it made last month. Average monthly benefit checks will increase by about $67.90, according to the nonpartisan group’s latest projection.
Meanwhile, AARP raised its 2027 COLA forecast to 3.6 percent, up from a previous estimate of 3.5 percent in August. The increase would add about $75 a month to the average retired worker’s benefit, according to the organization.
In 2026, approximately 75 million Social Security and Supplemental Security (SSI) recipients would receive a 2.8 percent increase in their benefits.
Estimates for 2027 vs. past increases
Over the past decade, Social Security’s COLA has ranged from zero percent in 2016 to 8.7 percent in 2023, the highest increase in four decades due to factors such as rising inflation. According to the Social Security Administration, COLAs have averaged about 3.1 percent over the past decade.
When to expect COLA news?
According to the report, the official Social Security COLA for the coming year will not be set until next month when government inflation data is released. The Social Security Administration generally announces the COLA for the following year in October. It is determined by the percentage increase in inflation data for the third quarter from the previous year to the current year.
The calculation is based on a specific measure of inflation called the Consumer Price Index for Urban Wage and Administrative Workers (CPI-W). The CPI-W rose 3.5 percent in the 12 months through August, according to data released Friday by the Bureau of Labor Statistics.
Meanwhile, the broader Consumer Price Index (CPI) rose 3.4 percent over the same period, reflecting higher prices for goods and services.
Attention will now turn to September’s inflation data as millions of pensioners wait for clarity on their monthly allowances.
