COLA increase estimated to be 3.2% in 2027
In 2027, Americans receiving Social Security could see a cost-of-living adjustment (COLA) between 3.2% and 3.6%, based on forecasts following July’s inflation report from the Bureau of Labor Statistics. This increase may add approximately $67 per month to beneficiaries’ benefits. Initial estimates in May projected a COLA above 4.2%, but as inflation eased slightly to 3.4% in July, the predicted adjustment has decreased slightly.The current estimate remains higher than the 2.8% increase in 2026, reflecting higher inflation rates compared to the previous year. These predictions, from the Committee for a Responsible Federal Budget and the Senior citizens league, are based on July’s consumer price index data.The adjusted rates aim to align benefits with inflation, which has generally been above the decade’s average of 2.6%. While higher COLAs can support seniors temporarily, they also pose financial challenges for the Social Security fund, which is approaching insolvency in six years. The Social Security Administration is expected to announce the official COLA in mid-October after September’s inflation data is released.
Americans on Social Security could see an estimated cost-of-living adjustment between 3.2% and 3.6% in 2027, according to multiple forecasts, after the Bureau of Labor Statistics released its July inflation report.
The estimated COLA could add about $67 per month to beneficiaries’ pockets next year, according to Dow Jones’s MarketWatch. The estimates come as inflation has slightly cooled, according to Wednesday’s inflation report, after a spring of rising inflation from high energy costs due to the war in Iran.
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In May, forecasters had estimated that the COLA could top 4.2% in 2027 due to rising costs, but as inflation fell one-tenth of a percentage point in July to 3.4%, the COLA estimate has also dropped slightly. However, the current COLA rate estimates are still higher than in 2026, when benefits increased 2.8%, as inflation sits higher than last July’s 2.7%.
The new 3.2 to 3.6% rates are estimates from the Committee for a Responsible Federal Budget and the Senior Citizens League, which used data from the July consumer price index report to inform their predictions.
2027’s estimated COLA is about a full percentage point higher than the average COLA over the past decade, which has been 2.6%, according to MarketWatch. The annual adjustment helps keep Social Security benefits up to date and in line with inflation rates.
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“High COLAs can provide helpful near-term support to seniors, but also impose significant costs for a Social Security retirement fund that is just six years from insolvency,” the Committee for a Responsible Federal Budget told Fox Business.
The Social Security Administration typically announces the next year’s COLA in mid-October after the release of the September inflation report.
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