2027 COLA Estimate Takes Another Dip Despite High Prices

The outlook for 2027 Social Security benefits dropped again in August. According to data from The Senior Citizens League (THCL), the latest Cost of Living Adjustment (COLA) forecast dipped 0.1% to 3.5% in August from 3.6% in July.

In July 2026, the average monthly benefit for retired workers was $2,085.98, based on the Social Security Administration (SSA)'s July Monthly Statistical Snapshot. Factoring in a 3.6% COLA, that average monthly benefit would increase by $73.01 to reach $2,158.99.

We're just a few weeks away from the official COLA announcement, which typically comes in mid-October. According to TSCL's latest press release, the rate will be announced on October 14, though estimates could still change before then.

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"The biggest thing we’re watching with the COLA announcement coming is short-term shocks to the economy that push inflation way up or down in the next 30 days. Of the three CPI-W figures used to calculate the COLA, two are already in," said Shannon Benton, executive director of The Senior Citizens League.

The official COLA is calculated using the average CPI-W for the third quarter only (July, August and September). The September CPI numbers are scheduled to be released at 8:30 on October 14. The COLA announcement should follow shortly after the final third-quarter numbers are announced.

The new 2027 COLA projection

The Senior Citizens League (TSCL) is predicting a 3.5% COLA for 2027. If this projection holds, retirees would see an average monthly increase of about $73.01. This would raise the average monthly benefit check from the current $2,085.98 to $2,158.99.

Kiplinger staff economist David Payne projects a 3.6% COLA, arguing that "high energy prices bleed into other categories." This is 0.1% higher than TSCL's final estimate.

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, dropped to 3.6% in July, and slipped 0.1% to 3.5% in August.

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).

What is driving the uptick in inflation?

Inflation ticked back up to 3.5% after dropping for two months in a row. The August CPI showed that the "index for energy increased 2.1 percent over the month," and the "index for gasoline rose 3.9 percent in August, accounting for over one-third of the monthly all-items increase," according to the Bureau of Labor Statistics. The food index also rose 0.1%, and the food-away-from-home index rose 0.3%.

It may seem odd that TSCL lowered its projection. You'll find a range of projections because different analysts produce different estimates. The variance usually comes down to different methodologies, different data and when the calculations are performed. For instance, AARP projects a COLA of 3.6%, while FEDweek concurs with TSCL's 3.5% estimate.

“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 too small to keep up with costs. They estimate that "payments would need to rise by 15.7% 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 Medicare Part B premium could reach $360.60 by 2035. If the estimates are accurate, the Part B premium is expected to rise 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 by up to 8% for each full year you wait until age 70.

If you wait until 70, your monthly benefit will be 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

• 8 Changes Coming to Medicare in 2027
• 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