Writer: Andrew Allen
Editor: Adam West
Reviewer: Ashley Fricker
Key Takeaways
Social Security recipients could see their monthly benefits rise by nearly $68 next year, but that increase may not stretch as far as it sounds.
The Social Security Administration isn’t set to announce the cost-of-living adjustment (COLA) for Social Security benefits in 2027 until next month, but that hasn’t stopped groups from releasing estimates of what the adjustment may look like.
The Senior Citizens League (TSCL), an affiliate of TREA, recently issued its forecast for the 2027 COLA, predicting the figure will come in at 3.5%. That represents a drop from the estimate given in June, when TSCL — which calls itself one of the largest nonpartisan senior groups in the country — predicted it could be as high as 3.8%.
But 3.5% would still be higher than the COLA increase for 2026, which was 2.8%.
How the 2027 Social Security COLA Is Calculated
According to its website, the Social Security Administration bases the COLA “on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.”
Two of the three months used in the calculation — July and August — are already available. September’s CPI-W data will provide the final piece needed to determine the official adjustment.
Many people who rely on Social Security income to make ends meet will be watching closely to see whether the 2027 COLA predictions prove accurate.
“The actual dollar increase that people see may or may not be sufficient to cover higher expenses for food, housing, utilities, gas, and other household expenditures.” — Meredith Freed, Senior Policy Manager at KFF
BadCredit.org reached out to The Senior Citizens League to learn more about the forecasting model it uses to estimate upcoming changes in the COLA.
Alex Moore, a statistician with TSCL, told us that, at this juncture, the organization has a lot of confidence that its prediction will end up being very close to the final COLA.
“Our model is a machine learning model (random forest) trained to predict what the average CPI third-quarter change will be each year,” Moore explained to us. “It looks at how long away from the announcement we are, the CPI-W data, Federal Reserve interest rates, and unemployment rates.”
What a 3.5% COLA Would Add to Monthly Checks
An upward adjustment of 3.5% may sound attractive to many Social Security recipients, but others may wonder what that increase would mean for their actual benefit checks.
TSCL estimates that the average monthly benefit would rise by $67.90, from $1,940.08 to $2,007.98, if its forecast proves correct.
People can get a rough idea of their potential increase by multiplying their monthly benefit by the projected COLA. For example, a $1,000 monthly benefit would receive a gross increase of roughly $35 before any applicable deductions if TSCL’s forecast proves correct.
Projected 3.5% COLA Would Add $67.90 a Month
Source: The Senior Citizens League, Sept. 11, 2026. The 2027 figure is projected.
The actual increase recipients see in their deposited payments could be smaller. Changes in Medicare Part B premiums, which have not yet been announced for 2027, could offset part of the COLA for beneficiaries whose premiums are deducted from their Social Security payments.
How the potential 3.5% increase affects retired people who live on Social Security will partly depend on their individual circumstances, according to Meredith Freed, Senior Policy Manager with KFF, a health policy organization.
“The COLA will help Social Security recipients cover rising costs,” Freed told us.
“But depending on cost of living in different areas and people’s different consumption patterns, the actual dollar increase that people see may or may not be sufficient to cover higher expenses for food, housing, utilities, gas, and other household expenditures,” she added.
Why Social Security Benefits May Still Lose Buying Power
Moore added that seniors don’t think the COLA does enough to account for inflation. He pointed to TSCL research estimating that Social Security benefits have lost approximately 13.7% of their purchasing power over the past 10 years. And it’s not just one type of expense causing problems for people.
“The biggest items outpacing inflation are a mix of big-ticket and small-ticket things,” Moore told us. “Housing costs are just going up faster than inflation for everyone. Rent and home ownership were two very hard-hit categories, but there’s a lot of day-to-day inflation that’s outpacing inflation at large.”
The COLA is designed to help benefits keep pace with inflation, but it does not guarantee that recipients’ purchasing power will increase, particularly when their expenses rise faster than the CPI-W.
Regardless of the figure the Social Security Administration announces for its 2027 adjustment on October 14, beneficiaries won’t receive the extra money immediately.
The new COLA will be reflected in January 2027 benefit payments. Exact payment dates will vary according to each beneficiary’s regular Social Security payment schedule.
