WASHINGTON, Aug. 13 (Senior Newspaper) — Preliminary estimates for the 2027 Social Security cost-of-living adjustment now range from 3.2% to 3.6%, giving beneficiaries and household budget planners a narrower but still uncertain picture of next year’s increase.
The estimates came after the Bureau of Labor Statistics reported that the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, rose 3.4% over the 12 months through July. That was down from 3.5% in June.
The Committee for a Responsible Federal Budget projects the smallest increase, at 3.2%. AARP estimates a 3.5% adjustment, while the Senior Citizens League projects 3.6%. Independent Social Security and Medicare policy analyst Mary Johnson estimates a 3.4% increase.
The projections are not the final benefit adjustment. The Social Security Administration will use CPI-W readings from July, August and September to calculate the official 2027 COLA.
What the estimates could mean for benefits
A COLA is an annual adjustment intended to help Social Security benefits keep pace with changes in consumer prices. It applies to Social Security and Supplemental Security Income payments under the federal program.
The Senior Citizens League calculated that a 3.6% increase would raise an average monthly benefit by $69.75, from $1,937.53 to $2,007.28. That calculation is an estimate based on the group’s projected adjustment, not an announced change in benefits.
The actual dollar increase will vary by beneficiary because it depends on the person’s current benefit amount. A higher percentage adjustment would provide more money each month but would also reflect the higher inflation measured under the program’s formula.
Why the projections differ
The groups are interpreting inflation data before all of the numbers used in the official calculation are available. August and September CPI-W readings have not yet been reported, so changes in food, energy and other prices could move the estimates.
Rich Johnson, AARP’s vice president for financial security, said there was uncertainty about how food and energy prices would develop over the remaining two months and that the estimate was not final.
Shannon Benton, executive director of the Senior Citizens League, described inflation as volatile this year. The group’s estimate fell to 3.6% from an earlier 3.8% projection.
Mary Johnson also lowered her estimate to 3.4%, from 3.7% the previous month and 4.7% in June. She attributed the change to a moderation in inflation.
The revisions show why early COLA forecasts can change. Before the July report, earlier estimates included 3.8% from the Senior Citizens League, 3.6% from AARP and 3.7% from Mary Johnson.
When the official number is expected
The Social Security Administration is expected to announce the official 2027 COLA on Oct. 14, after the September inflation data are released. Benefits reflecting the adjustment are expected to begin in January 2027.
Until the administration makes that announcement, the current figures are forecasts rather than completed policy action. Social Security beneficiaries, retirees and workers planning future income will need to wait for the remaining inflation readings and the agency’s calculation to know the final increase.
