2027 Social Security COLA: Early forecast points to smaller raise

More than 74.9 million people receive Social Security benefits, according to the Social Security Administration (SSA). Many of them rely on Social Security for their financial well-being. For nearly 22 million seniors, it’s their only form of income in retirement.

Each year, the SSA announces an annual cost-of-living adjustment (COLA) to benefits to help you keep up with rising inflation. The 2.8% COLA for 2026 took effect this month, up slightly from 2.5% in 2025.

But early predictions suggest next year’s adjustment will reverse that trend: The nonpartisan Senior Citizens League (TSCL) projects the 2027 COLA at just 2.5% — 0.3 percentage points lower than this year’s.

For the millions who depend entirely on Social Security, these modest COLAs spark real concerns about falling further behind on costs. The official October 2027 COLA won’t be announced until October 2026, leaving nine months for the economy to shift. For now, TSCL’s estimate suggests seniors should prepare for another small increase.

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How is the Social Security COLA calculated?

The Social Security cost-of-living adjustment exists to level the playing field and keep benefits keep pace with inflation. The adjustments aren’t arbitrary. Rather, the Social Security COLA calculation uses data from the Consumer Price Index (CPI-W) released by the Bureau of Labor Statistics at a specific point in time to inform the increase.

“The SSA COLA is not a mystery, it is based on the CPI-W,” says Brooke Petersen, CFP, ChFC and wealth consultant at investment advisory firm Conrad Siegel. “The COLA is based on the percentage increase in the CPI-W from the third quarter of the previous year to the third quarter of the current year.”

This automatic calculation has been in place since 1975, thanks to a COLA provision in the 1972 Social Security Amendments. Since then, there have been three years when CPI-W showed no increase, resulting in 0% COLA: 2010, 2011 and 2016.

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What is the 2027 COLA prediction?

The current Social Security COLA projection for 2027 is 2.5%, according to the Senior Citizens League. This would mark a return to the same level as the 2025 COLA, which was also 2.5%.

TSCL updates its projection monthly based on economic data, and the estimate could shift before the Social Security Administration makes its official announcement in October 2026. The official COLA calculation uses third-quarter CPI-W data from July through September 2026.

The latest 2027 COLA prediction is based on December CPI-W data, which came in at an elevated 2.7% on January 13. If TSCL’s 2.5% projection for 2027 holds, seniors would see a smaller cost-of-living increase in 2027 than they received this year.

COLA over the last decade: 2015 to 2026

COLA has varied widely over the past 10 years. The lowest COLA in that timeframe was in 2016 at 0.0%, and the highest was in 2023, when COLA was a whopping 8.7%.

The Social Security 2026 COLA increase was a lower 2.8%.

The projected 2027 COLA for Social Security is 2.5% according to an January 13 TSCL press release — slightly lower than this year’s 2.8% adjustment. The percentage may change as the economy evolves in 2026, but the broader concern remains: COLA increases haven’t kept pace with retirees’ actual costs.

A 2025 survey from the Employee Benefit Research Institute echoes that sentiment. About 70% of workers worry that inflation, market volatility and rising housing costs will force them to cut spending. Among retirees, nearly 40% say healthcare expenses have been higher than expected in retirement.

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What the 2027 COLA increase means for your retirement

If you receive Social Security benefits, the projected 2027 COLA for Social Security can give you an idea of the increase you might see next year. But you’ll have to hold tight for the official numbers.

“The COLA applied to beneficiaries’ checks starting in January 2027 will be calculated and announced in October,” says Martha Shedden, president and co-founder at the National Association of Registered Social Security Analysts.

The increase can help battle inflation and retain purchasing power, but other costs offset the benefit of your Social Security benefits.

“Medicare Part B premiums have the largest impact on the net amount of retirees’ Social Security income since those premiums are deducted from the Social Security checks,” says Shedden.

The main issue is that the COLA increase doesn’t account for all of the added costs everyone’s facing, especially seniors paying for Medicare on limited incomes.

“As we have all experienced, the cost of goods and services are significantly higher,” says Petersen. He explains that the increases for Medicare Part B and Medicare Part D have significantly exceeded the Social Security COLA, eroding purchasing power.

As of now, the Social Security COLA projection for 2027 is lower than the 2026 COLA, which could feel like a bigger blow. But we’ll have to wait until October to find out.

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FAQs: Social Security and your retirement

Learn more about Social Security and your benefits with these commonly asked questions. And take a look at our growing library of personal finance guides that can help you earn money, save money and grow your wealth.

What is the average Social Security check?

The average Social Security check is $2,016.64 a month as of January 2026, according to the latest data from the Social Security Administration. Individual monthly benefits vary and could be more or less than the average.

The maximum Social Security benefit at full retirement age (FRA) is $4,152 a month, though few beneficiaries reach it due to complex math that accounts for your highest 35 years of earnings, average indexed monthly earnings and your primary insurance amount. Learn more about how the SSA calculates your benefits.

What is the Senior Citizens League?

The Senior Citizens League calls itself the one of the nation’s largest nonpartisan seniors groups with a mission to educate older Americans and retirees about their rights and freedoms as U.S. citizens and protect the benefits — including Social Security — they’ve earned and paid for.

I’m worried about outliving my retirement savings. Any tips to make it last longer?

As you approach retirement, among the most critical decisions you’ll face is how to strategically withdraw from your hard-earned savings. The order in which you tap into your various retirement accounts can significantly impact your tax burden and the longevity of your nest egg. While there’s no one-size-fits-all withdrawal order, learn general rules of thumb in our guide to a retirement withdrawal strategy.

How long has Social Security been around?

Social Security was signed into law by President Franklin D. Roosevelt in August 1935 with the Social Security Act to provide income to Americans in retirement. The country began paying taxes into the program starting in 1937.

That first year, recipients received benefits as a one-time payment. Monthly Social Security benefits started in 1940.

How much money can I make in retirement and still collect Social Security?

For the 2026 tax year, your annual earnings limit is $24,480 (up from $23,400 in 2025). If you’ll reach full retirement age in 2026, the most you can earn in the months before retirement is $65,160 (a bump from $62,160 in 2025).

Enter your birthdate and salary into the SSA’s earnings test calculator to see how your earnings before retirement might affect your Social Security benefits.

About the writer

Melanie Lockert is an L.A.-born and Brooklyn-based freelance writer with a decade of experience in personal finance. Melanie started the Dear Debt blog in 2013 and chronicled her journey out of $81,000 in student loan debt. She published a book of the same name in 2016. Her personal finance expertise has been featured on Fortune Recommends, CNN, Yahoo Finance and Business Insider, among other publications. She is also the host of the Mental Health and Wealth Show and cofounder of the Lola Retreat, a finance event for women.

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