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.
