5 minEconomy
Social Security’s 2027 COLA Is Tracking Near 3.5%
Current forecasts place the 2027 Social Security cost-of-living adjustment near 3.5%, but the official figure cannot be calculated until August and September CPI-W data are released.
Social Security beneficiaries are likely to receive a larger cost-of-living adjustment in 2027 than they did this year, according to current inflation-based forecasts, although the official figure cannot yet be calculated.
As of August 25, estimates from three analysts and advocacy groups cluster between 3.4% and 3.6%. AARP projects a 3.5% increase. The Senior Citizens League forecasts 3.6%. Independent Social Security and Medicare analyst Mary Johnson has calculated a 3.4% rolling estimate.
The 2026 COLA was 2.8%.
The final 2027 adjustment will depend on inflation data for August and September, which have not yet been released. The Bureau of Labor Statistics is scheduled to publish the August Consumer Price Index on September 11 and the September report on October 14, both at 8:30 a.m. Eastern time.
The Social Security Administration says the next COLA will be announced in October. Because the September CPI report provides the final month required for the calculation, retirement groups expect the 2027 figure to be announced on October 14.
How the Social Security formula works
The annual COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W. Social Security averages the CPI-W for July, August and September and compares it with the third-quarter average from the relevant prior year. Any increase is rounded to the nearest tenth of a percentage point.
The third-quarter CPI-W average for 2025 was 317.265. The July 2026 CPI-W was 327.104, an increase of 3.4% from July 2025.
July is only the first of the three months used in the calculation. That makes current COLA estimates informative but not official.
The sensitivity of the formula can be seen in simple examples. If CPI-W rose by roughly 0.3% in both August and September from July’s level, the eventual COLA would be about 3.4%. Monthly increases of about 0.4% would put the result near 3.5%. Increases around 0.5% in each of the two remaining months would produce a COLA close to 3.6%.
Those scenarios are illustrations rather than predictions. CPI-W is reported on a non-seasonally adjusted basis for the COLA calculation, and energy and other volatile prices can move the index between months.
Forecasts have moved lower since July
The Senior Citizens League cut its 2027 COLA estimate to 3.6% on August 12 after previously projecting 3.8% in July. AARP’s August 12 estimate is 3.5%, based on current inflation trends. Johnson’s August 25 rolling estimate is 3.4%.
The range suggests that forecasters broadly agree on the direction but differ on how much inflation will persist through the end of the third quarter.
For beneficiaries, the difference between 3.4% and 3.6% is noticeable but not dramatic. Social Security Administration data show that the average retired worker received $2,085.98 a month in July.
A 3.4% adjustment applied to that amount would add about $70.92 a month. A 3.5% adjustment would add about $73.01, while a 3.6% adjustment would add about $75.10. The illustrative new monthly benefit would therefore range from about $2,156.90 to $2,161.08 before deductions.
Actual 2027 payments will differ because each beneficiary starts from a different base amount and may have Medicare premiums, taxes, overpayment recovery or other deductions withheld.
Medicare could reduce the net increase
The cost-of-living adjustment is applied to gross Social Security benefits, but many retirees have Medicare Part B premiums deducted directly from their monthly payments.
The 2026 Medicare Trustees Report estimates a standard Part B premium of $209.50 a month for 2027, up from $202.90 in 2026. That estimate implies a $6.60 monthly increase, although the final 2027 premium has not yet been announced.
If both a 3.5% Social Security COLA and the trustees’ Part B estimate were to hold, a beneficiary receiving the current average retired-worker benefit would see a gross Social Security increase of about $73 a month, with roughly $6.60 of that potentially offset by the higher standard Part B premium before considering any other deductions.
The remaining uncertainty will shrink quickly. The September 11 inflation report will provide the second of the three CPI-W readings used in the formula. The October 14 report will provide the third and allow the official adjustment to be calculated.
Until then, the current 3.4% to 3.6% band is best treated as a planning range rather than a promise. The formula is fixed; the last two inflation readings are not.
