Social Security recipients could see a bigger cost-of-living adjustment in 2027 as inflation rises

Social Security beneficiaries are expected to see a larger cost-of-living adjustment (COLA)next year amid rising inflation, according to new reports. An analysis by The Senior Citizens League (TSCL) predicts that the 2027 COLA will be 3.9%, which would represent an increase of 1.1 percentage points from this year's 2.8% COLA. TSCL's previous prediction for the 2027 COLA was 2.8% in its February and March estimates. TSCL estimates that the average Social Security benefits check for retired workers would rise by $81.17, up from $2,081.16 to $2,162.33. "Many seniors are telling us the same thing: As inflation picks back up, life still does not feel affordable. The average senior already lives on much less than younger Americans, according to the Census Bureau, and our supporters constantly tell us they feel like they're falling farther and farther behind," said TSCL Executive Director Shannon Benton. The report noted that pressure from elevated oil prices could push inflation even higher, as energy prices impact household budgets directly and through higher transportation costs for other goods. The nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated that the 2027 COLA will be 3.8% based on the latest inflation data – slightly lower than the TSCL's estimate. CRFB notes that depending on inflation data over the next five months, the COLA will likely end up somewhere in a range between 3% and 4.5%. It also cautioned that if wages don't rise in response to the ongoing rise in inflation, it will widen Social Security's budget deficit and accelerate the insolvency of a key trust fund. "If the recent spike in inflation boosts the COLA to 3.8% without increasing wages, we estimate it would worsen Social Security's shortfall by roughly $300 billion over the next decade and advance the insolvency of the old age trust fund by three months from late 2032 to earlier in the year," CRFB noted.