Millions of Americans who rely on Social Security could be on track for a benefit increase as a result of inflation during President Donald Trump's second term. Experts say beneficiaries may receive one of the larger cost-of-living adjustments (COLA) in recent years in 2027, boosting monthly payments for nearly 75 million retirees and disabled Americans. While a bigger COLA would put more money into beneficiaries' pockets, the increase is not necessarily good news, as economists say it merely reflects that rising consumer prices are continuing to erode seniors’ purchasing power, leaving them struggling to keep up with housing and health care costs.
Social Security benefits are adjusted annually through the COLA formula, which is designed to help recipients maintain their purchasing power when inflation rises. The latest estimates suggest 2027 could bring a COLA between 3.5 percent and 3.6 percent, according to The Senior Citizens League (TSCL) and AARP. If those estimates hold, it would mark the second straight year of above-average increases and continue what many have dubbed the "Trump Bump.” For the roughly 75 million Americans receiving Social Security or Supplemental Security Income (SSI), even a small percentage increase can translate into hundreds of additional dollars over the course of a year.
Social Security recipients received a 2.8 percent COLA for 2026, raising average retirement benefits by about $56 per month. Now, forecasts indicate retirees could see a larger increase in 2027. AARP estimates a 3.5 percent COLA, while TSCL projects 3.6 percent.
Using AARP's estimate, the average retired worker receiving approximately $2,086 per month in July 2026 would receive about $73 more each month, bringing average benefits to roughly $2,159. Over a full year, that would amount to around $876 in additional benefits. However, the official figure will not be finalized until October, after the Social Security Administration reviews inflation data from July, August and September.
The nickname stems from the relationship between inflation and Social Security benefit increases. COLAs are not determined by congressional action or presidential approval. Instead, they are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
However, the tariffs implemented during Trump's presidency and energy market disruptions tied to conflict in the Middle East have contributed to the inflationary pressures that are now feeding into the COLA calculation. It simply means prices are rising at a slower rate. CPI measures changes in the price level over time, and the percentage change tells us the rate of inflation,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
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