Social Security COLA for 2027 may be 4.7% amid inflation: Estimate
A customer purchases items at an HEB grocery store in Austin, Texas, May 11, 2026.
Brandon Bell | Getty Images
According to new data, consumer prices rose in May and the annual inflation rate reached the highest level in the last three years. government data.
That represents a 4.7% adjustment in the Social Security cost of living for 2027, according to a new estimate from independent Social Security and Medicare policy analyst Mary Johnson. Last month, Johnson forecast a 4.2% COLA for next year.
“There is a high probability that this rate will rise above 4.7%, especially as data on gasoline prices continues to come in,” Johnson said.
The Social Security Administration usually announces the COLA for the following year in October, and the change is based on third-quarter data.
Meanwhile, the Senior Citizens League, a nonpartisan group, now has a prediction: 3.8% COKE For 2027, there was a decrease from the 3.9% forecast in May. The reason for the drop in forecast was not specified, and the Senior Citizens Union did not respond to a request for comment.
Approximately 75 million Social Security and Supplemental Security Income beneficiaries in 2026, 2.8% increase into their monthly checks through a cost-of-living adjustment.
But while that would increase average monthly earnings of $2,000 by about $56, beneficiaries would need a $94-per-month increase to keep up with inflation, according to Johnson.
According to the Social Security Administration, the annual COLA has averaged around 3.1% over the past decade.
Social Security’s COLA is calculated using a subset of the consumer price index known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
Overall CPI inflation rose 4.2% over the past 12 months as of May, the Bureau of Labor Statistics said Wednesday. Meanwhile, CPI-W increased by 4.4% in the last 12 months.
Price increases affecting COLA estimation
Among the categories that saw the biggest increase in CPI-W over the last 12 months were fuel, up 64.1%; There was a 40.7% increase in gasoline and a 25% increase in flight tickets.
Older Americans continue to struggle with higher costs.
Following the Covid-19 outbreak, inflation rose to new levels, leading to a greater economic crisis. Social Security COLAs 5.9% in 2022 and 8.7% in 2023.
But consumer prices remained mostly high, even as the pace of inflation slowed and Social Security reduced cost-of-living adjustments in subsequent years.
According to AARP’s latest financial security trends, a majority, or 69%, of adults age 50 and older say they are concerned that prices are rising faster than their income questionnaireIt was held in January.
Meanwhile, 61 percent of older Americans say the average monthly Social Security payment of $2,000 is not enough, according to the survey.
Experts and lawmakers debate whether the CPI-W accurately reflects the prices experienced by older Americans.
Everyone has a personal inflation rate, depending on their individual spending needs and factors such as where they live.
Beef and coffee are among the grocery categories with the highest inflation, according to the broader consumer price index. However, the average price of a pound of beef varies depending on location.
In response to high food prices, seniors may tend to eat less and choose cheaper items over more expensive ones, such as beef, to help reduce grocery costs, Johnson said.
