Social Security 2027 COLA estimate rises with gas prices
A customer pumps gas into his vehicle in Miami, Florida, on October 24, 2025.
Joe Raedle | Getty Images
Social Security cost of living adjustment Prices could rise even higher for 2027 as new government data shows a rise in inflation and gasoline prices, according to a new forecast.
Mary Johnson, an independent Social Security and Medicare policy analyst, estimated that the cost-of-living adjustment, or COLA, could be 3.2% in 2027 due to sharply rising gasoline prices, based on March consumer price index data released Friday that showed inflation rising to its highest level in almost two years.
This is higher than the 1.7% COLA increase Johnson predicted in March.
Social Security and Supplemental Security Income beneficiaries receive an adjustment to their benefits each year through COLA, which is intended to help ensure inflation doesn’t weaken the purchasing power of their benefits.
Separately, the Senior Citizens Alliance, a nonpartisan senior group, estimates COLA could be 2.8% According to the latest inflation data, there is no change in the 2.8% forecast in March for 2027.
In 2026, approximately 75 million Social Security and Supplemental Security Income beneficiaries received a 2.8% cost-of-living adjustment. This increased pensions $56 per monthOn average, it starts in January, according to the Social Security Administration.
According to the Social Security Administration, the COLA has averaged 3.1% over the past decade. However, as inflation soared following the Covid-19 pandemic, beneficiaries saw record high increases of 5.9% in 2022 and 8.7% in 2023. More modest increases have followed in recent years.
How does COLA reflect inflation?
The higher COLA forecast isn’t necessarily good news for retirees who have to absorb the shock of higher prices, according to Johnson.
“They always felt that the COLA underestimated their actual inflation experience,” Johnson said.
One September AARP research It found that 77% of Americans age 50 and older think the 3% COLA is not enough to keep up with rising prices.
About 72% of respondents said an increase of 5% or higher would be enough to cover daily expenses, while 26% said an increase of 8% would be necessary to keep up with rising costs, according to the AARP survey.
The Social Security COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which tracks price changes for certain goods and services.
The annual COLA adjustment is calculated by comparing CPI-W data for the third quarter of the current year with CPI-W data for the third quarter of the previous year. The percentage increase from year to year determines the COLA.
CPI-W rose 3.3% over the past 12 months, according to data released Friday by the Bureau of Labor Statistics.
