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Social Security’s cost of living adjustment is derived from the Bureau of Labor Statistics’ Consumer Price Index.Credit: Douglas Rissing\/Getty Images KEY TAKEAWAYS <\/p>\n
Social Security’s cost of living adjustment is derived from the Bureau of Labor Statistics’ Consumer Price Index.
Credit: Douglas Rissing\/Getty Images KEY TAKEAWAYS <\/p>\n
A recent estimate projects that the 2027 Social Security cost-of-living adjustment will be 3.9%.<\/p>\n<\/li>\n
That would be 1.1 percentage points higher than the 2026 COLA and the biggest boost since 2023.<\/p>\n<\/li>\n
The COLA is based on inflation data, which in April increased to its highest rate in three years.<\/p>\n<\/li>\n<\/ul>\n
The next cost-of-living adjustment (COLA)<\/a> for Social Security benefits is shaping up to be bigger than expected earlier this year.<\/p>\n The 2027 COLA is expected to be 3.9%, according to the most recent estimate from The Senior Citizens League, an advocacy group. The estimate puts the 2027 COLA 1.1 percentage points above the 2026 adjustment. For the average beneficiary, that would add about $81 to a monthly check.<\/p>\n Why This Matters <\/p>\n More than 75 million Americans receive Social Security benefits. Knowing next year’s benefit amount helps retirees plan their budgets and see whether Social Security is keeping up with the rise in their costs.<\/p>\n This is still an early estimate based on the available inflation data. The Social Security Administration (SSA) will announce the official COLA in October. If the 2027 COLA is 3.9%, it would be the biggest boost since 2023.<\/p>\n The SSA calculates the COLA using the year-over-year change in inflation during the third quarter (July-September). The inflation measure used is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)<\/a>.<\/p>\n Inflation has picked up following the start of the Iran war, which has driven up energy prices<\/a> and, in turn, other product prices<\/a>. In the latest CPI-W report, prices rose by 3.9% in April, the highest increase in three years. While April’s reading isn’t one of the months that feed directly into the COLA formula, it does suggest a rise in inflation could continue in the third quarter.<\/p>\n <\/p>\n