The projected 2027 Social Security cost-of-living adjustment is tracking between 3.4% and 3.6% following government inflation data released in July, according to preliminary estimates from policy analysts and advocacy groups. That adjustment is designed to help benefits keep pace with inflation, though the official percentage will not be finalized by the Social Security Administration until October.
Projections From Leading Policy Analysts and Advocacy Groups
Independent Social Security and Medicare policy analyst Mary Johnson estimates the 2027 COLA will land at 3.4%, based on July Consumer Price Index data released by the Bureau of Labor Statistics. That forecast is down from her June projection of 4.7% and her earlier July estimate of 3.7%, driven by a broader moderation in consumer price pressures. Meanwhile, the nonpartisan Senior Citizens League estimates the adjustment will be 3.6%, a slight dip from its earlier 3.8% forecast. AARP projects a 3.5% COLA, an increase that would raise the average retired worker’s benefit by $73 per month.
Kiplinger staff economist David Payne offers a range depending on near-term energy costs, projecting a 3.5% COLA if oil prices stay elevated and a 3.3% COLA if they drop. While these preliminary figures sit higher than the long-term historical average COLA of around 2.6%—and the 3.1% average over the past decade—they represent a significant cooling from the pandemic-era spikes of 5.9% in 2022 and 8.7% in 2023.
How the CPI-W Drives the Calculation
The Social Security Administration calculates the annual COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W. Government data shows the CPI-W rose 3.4% over the 12-month period ending in July. The official size of the 2027 adjustment will be determined by comparing the average CPI-W figures for the third quarter of this year—covering July, August, and September—with the corresponding third-quarter figures from the previous year.
“A moderation in inflation has resulted in bringing down my estimate from higher peaks earlier this year,” Mary Johnson said in a statement regarding the updated July data. Because the calculation relies entirely on third-quarter data, the current estimates remain subject to change depending on how inflation fares over August and September.
Impact of Rising Medicare Premiums on Net Benefits
While an incremental bump in monthly benefits provides relief, advocacy groups emphasize that real-world costs experienced by older Americans often outpace headline inflation indices. Shannon Benton, executive director of The Senior Citizens League, notes that seniors experience inflation at the grocery store, the pharmacy, in rent payments, and through insurance premiums rather than on a statistical chart. The league’s recent studies argue that historical COLAs have failed to prevent a steady erosion of purchasing power over the last decade.
Furthermore, annual benefit increases are frequently offset by rising Medicare costs, as Part B and Part D premiums are typically deducted directly from monthly Social Security checks. The 2026 Medicare Trustees Report projects continued increases in Part B premiums and related surcharges, meaning beneficiaries will see a portion of their 2027 COLA absorbed by healthcare expenses before funds ever reach their bank accounts.
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