Social Security recipients are on track for their biggest annual cost-of-living adjustment (COLA) since the inflation surge that followed the COVID-19 pandemic, with leading forecasts pointing to a 3.5 to 3.6 percent increase in benefits next year. AARP currently projects a 3.6 percent COLA for 2027, while the Senior Citizens League (TSCL) predicts a slightly lower 3.5 percent. The official increase will be announced next week on October 14, after the Bureau of Labor Statistics (BLS) releases its final inflation figures needed for the calculation.
Either forecast would be an increase from the 2.8 percent COLA beneficiaries received in 2026 and would be the largest adjustment since the 8.7 percent increase that took effect in 2023. That unusually large 2023 increase followed the sharp inflation experienced after the pandemic. Consumer prices increased 7 percent during 2021, while average prices rose another 8 percent from 2021 to 2022, according to the BLS.
The annual COLA helps benefits keep up with rising costs. Without an annual adjustment, inflation would gradually reduce what beneficiaries can afford with their monthly payments. That matters particularly for the more than 70 million retirees and disabled Americans who claim Social Security benefits to help cover essentials such as housing, food, utilities and health care.
The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. Social Security compares the average CPI-W during July, August and September with the average during the same three months in the previous year. The percentage increase, rounded to the nearest one-tenth of a percentage point, then becomes the next COLA.
Two of the three figures needed for the 2027 calculation have already been released. The CPI-W rose 3.4 percent year over year in July and 3.5 percent in August, according to TSCL. September's figure will determine the final adjustment.
The Bureau of Labor Statistics is scheduled to publish September's Consumer Price Index data at 8:30 a.m. ET on Wednesday, October 14. A 3.5 or 3.6 percent adjustment would be higher than each of the past three increases, although considerably below the increases beneficiaries received during the post-pandemic inflation spike.
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