Social Security COLA Announcement Drops Oct. 14. Here’s What to Know Ahead of It
If you’re on Social Security, there’s a reason to mark Oct. 14 on your calendar. That’s the date the Social Security Administration is expected to announce an official cost-of-living adjustment, or COLA, for 2027.
Of course, that raise won’t actually take effect until January. But knowing what to expect in advance could make financial planning for the new year easier.
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If you can’t wait until Oct. 14 to learn more about the upcoming COLA, here are a few key things to know right now.
The 2027 COLA is likely to be larger than this year’s raise
Earlier this year, Social Security benefits rose 2.8%. If you’re hoping your upcoming boost will be greater than that, here’s some good news.
Current projections are calling for a 3.5% to 3.6% COLA in 2027. The actual COLA could differ depending on how inflation wound up trending in September. But it looks like the upcoming COLA will be much bigger either way.
A larger COLA may not be a total win
If next year’s COLA is substantially higher than 2.8%, that’s not necessarily something to celebrate. A large Social Security COLA indicates that prices are rising rapidly. And if prices continue to increase in the new year, even a 3.5% to 3.6% COLA could easily fall behind.
Also, we don’t know how much Medicare Part B premiums will rise in 2027. Seniors who are enrolled in Social Security and Medicare at the same time pay for Part B out of their monthly benefits. A significant Part B increase could erode the upcoming COLA.
This isn’t unique to 2027. It’s something dual enrollees face every year.
It’s important to have realistic expectations
While it looks like the upcoming Social Security COLA will be substantial, you shouldn’t expect that increase to improve your finances significantly. The reality is that Social Security COLAs are meant to help benefits keep up with recent inflation. That’s about it.
If you’re having a hard time covering your expenses, rather than sit back and wait for your 2027 COLA to arrive, start taking steps to improve your situation. That could mean actually writing out a budget or experimenting with different apps that make it easy to track spending. It could mean reducing expenses, whether it’s larger ones like your home or smaller ones like cable and subscriptions.
Working part-time may be something worth considering as well if you’re able to manage it. While the upcoming COLA could give your Social Security paychecks a modest boost, working a few days a week could give your income a substantial boost, making it easier to cover your costs without constant worry.