Social Security COLA 2027 estimates rise with inflation
A man walks past the dairy section of a supermarket on March 17, 2026 in Houston, Texas.
Ronaldo Schemidt | AFP | Getty Images
New government data Rising inflation points to a higher Social Security cost-of-living adjustment for 2027, according to new estimates.
Social Security COLA That could be 4.2% in an environment where gasoline, energy and fresh produce prices are “rising sharply,” according to Mary Johnson, an independent Social Security and Medicare policy analyst.
Johnson’s new forecast is based on April consumer price index data released on Tuesday and is higher than the 3.2% COLA forecast for 2027 that Johnson forecast last month.
Meanwhile, the Senior Citizens Association, a nonpartisan senior citizens group, estimates the COLA could be 3.9% in 2027; This rate is higher than the 2.8% annual increase that the organization predicted in April.
Higher COLA estimates come as consumers continue to face price pressures. According to Johnson, prices of categories such as household heating oil, tomatoes, gasoline, coffee and fresh vegetables have increased in the last 12 months.
Social Security benefits have lost 13.7% of their purchasing power since 2016, and a 15.7% increase ($295.85 per month for the average beneficiary) would be needed to catch up, according to estimates from the Senior Citizens League.
In comparison, the Senior Citizens Association’s current 3.9% COLA estimate would increase average benefit checks for retirees by an estimated $81.17 per month.
Inflation was above expectations in April
New data shows broad consumer price index It increased by 3.8% in the last 12 months, the highest increase since May 2023, due to the faster than expected increase in prices of certain goods and services.
Meanwhile, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, used to calculate the Social Security COLA, rose 3.9% over the past 12 months. April data shows.
Social Security benefits increase 2.8% in 2026 for approximately 75 million beneficiaries. Annual COLA has averaged 3.1% over the past decade. Social Security Administration.
Social Security COLA estimates for 2027 are subject to change.
The Social Security Institution calculates COLA every year by comparing third quarter CPI-W data with the third quarter data of the previous year. If there is an increase from one year to the next, it determines the COLA.
Next year’s change is usually announced by the agency in October, so there will be five more months of inflation data before the official calculation of the 2027 Social Security COLA.
