Latest Inflation Data Drives Down 2027 Social Security COLA Forecast

The outlook for 2027 Social Security benefits slid in July. According to data from the Senior Citizens League, the latest Cost of Living Adjustment (COLA) forecast dipped 0.2% to 3.6% in July from 3.8% in June.

In June 2026, the average monthly benefit for retired workers was $2,084.40, based on the Social Security Administration (SSA)'s June Monthly Statistical Snapshot. Factoring in a 3.6% COLA, that average monthly benefit would increase by $75.03 to reach $2,159.43.

We are about two months away from the official COLA announcement that typically happens in mid-October. A lot can happen until then. We'll update this article monthly following the release of new CPI numbers and any changes in the forecast.

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The new 2027 COLA projection

The Senior Citizens League (TSCL) is predicting a 3.6% COLA for 2027. If this projection holds, it would result in an average monthly increase of approximately $75.03 for retired workers. This would raise the average monthly benefit check from the current $2,084.40 to $2,159.43.

Kiplinger staff economist David Payne has two projections, noting that "it depends on whether oil prices drop in the next 30 days or not, but I think COLA will be 3.5% if they stay elevated, and 3.3% if they drop."

How the projection has changed. The projection jumped from 2.8% in March to 3.9% in April, held at 3.8% through May and June, and has now dropped to 3.6% for July. If inflation continues a downward trend, we might see the figure fall even further ahead of the official October release.

Projected COLA data from The Senior Citizens League. *Their chart shows the Consumer Price Index (CPI) at 3.9%; the difference might be due to rounding. We updated the chart to show the Bureau of Labor Statistics (BLS) number that pegged the increase at 3.8% (PDF).

Why the 2027 COLA projection dropped

Inflation fell for the second month in a row from 3.5% to 3.4%. The July CPI showed that "the index for energy fell 1.5 percent in June," and the "index for shelter rose 0.1 percent in July, accounting for roughly two-thirds of the monthly all items increase," according to the Bureau of Labor Statistics. Also, the index for food increased by 0.1% and the index for food away from home increased by 0.3%.

“Seniors don't experience inflation as a percentage on a chart. They experience it at the grocery store, at the pharmacy, in their insurance premiums and when they pay the rent. That’s why the size of the COLA matters, but so does how accurately it reflects their real-world expenses," said Shannon Benton, executive director of The Senior Citizens League.

In TSCL's study, 2026 Loss of Buying Power, the league notes that "compared to 2016, Social Security benefits are only worth about 86.3 cents on the dollar," citing COLAs that are too small to keep up with costs. They estimate that "payments would need to rise by 15.7 percent, or $295.85 per month for the average beneficiary, to recover the lost value."

Medicare costs will also go up in 2027

Medicare premiums are usually deducted from monthly Social Security checks. For most, the benefits of the annual COLA increase are blunted by increased Part B and Part D premiums.

The 2026 Medicare Trustees Report (PDF) projects a steady increase in Medicare Part B premiums and IRMAA surcharges in the next eight years. The projections are based on expected increases in healthcare costs, particularly for outpatient hospital services and physician-administered drugs.

The report estimates that the standard monthly premium for Medicare Part B will potentially reach $360.60 by 2035. If the estimates are accurate, the Part B premium is expected to increase by 77.7% by 2035 compared with the 2026 level of $202.90.

This table shows the projected standard monthly premiums for 2027:

The Part D deductible ($700), Part D cap on out-of-pocket costs ($2,400) and base premium for 2027 have been finalized.

Read:

Projected 2027 IRMAA Brackets and Surcharges for Medicare Part B and D

How you can increase your monthly Social Security benefits

One way to increase your monthly Social Security benefit is to delay claiming your check until age 70. You receive an extra 2/3 of 1% for each month you delay after your birthday month, and you can further increase your benefit up to 8% for each full year you wait until age 70.

If you wait until 70, your monthly benefit is 24% to 28% higher than if you started to collect benefits at your full retirement age (FRA).

Collecting benefits before your FRA can lead to a permanent decrease in your benefits. If you were born in 1960 or later, taking benefits at 62 would reduce your check by 30%, and spousal benefits would be reduced by 27.5% to 35%.

Related Content

• The July CPI Report Shows Inflation Cooled. That's Good News for the Fed
• 2026 Social Security COLA is 2.8%: What You Need to Know
• When Will Social Security Run Out of Money? And Medicare?
• Medicare 2027 Projections: Here's How Much Your Monthly Premiums Are Estimated to Rise
• Your Medicare Costs Are Set to Soar: What to Expect Over the Next Decade
• Projected 2027 IRMAA Brackets and Surcharges for Medicare Part B and D