- New estimates show the Social Security cost-of-living adjustment may be 3.4% to 3.6% in 2027.
- The projections are based on the latest government <a href="https://todaytrendnews7.com/us-inflation-eases-as-food-costs-cool/” title=”US inflation eases as food costs cool”>inflation data, which shows consumer prices moderated in July.
- The size of the official Social Security COLA for 2027 will depend on two more months of government inflation data.
Customers looking at products in the refrigerated section inside Publix grocery store, North Beach, Miami Beach, Florida.
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The Social Security cost-of-living adjustment for 2027 may be3.4% to 3.6%,according to new estimates based on government inflation data released Wednesday
The Social Security cost-of-living adjustment, or COLA, is an annual adjustment that helps Social Security and Supplemental Security Income benefits keep pace with inflation. The Social Security Administration typically announces the official COLA for the upcoming year in October
New July CPI data released Wednesday points to a 3.4% Social Security COLA for 2027, estimates Mary Johnson, an independent Social Security and Medicare policy analyst.In comparison, Johnson had estimated last month the 2027 COLA could be 3.7%,down from her 4.7% June forecast amid climbing inflation
“A moderation in inflation has resulted in bringing down my estimate from higher peaks earlier this year,” Johnson said in a statement
The new estimate is still higher than the long-term average Social Security cost-of-living adjustment of around 2.6%, she said. In the past decade, the COLA has averaged 3.1%, the Social Security Administration said in October, as spikes in inflation prompted above-average benefit increases of 5.9% in 2022 and 8.7% in 2023
Meanwhile, the Senior Citizens League now estimates the 2027 Social Security COLA may be 3.6%.The nonpartisan senior group had previously forecast a 3.8% COLA in both June and July
The AARP projects the 2027 COLA may be 3.5% based on the new government inflation data. That would increase the average retired worker’s benefit by $73 per month, according to estimates from the nonprofit, nonpartisan organization representing Americans ages 50 and over
How the Social Security COLA is calculated
The Social Security cost-of-living adjustment is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. Data released on Wednesday shows the CPI-W rose 3.4% over the last 12 months as of July
The broader consumer price index was up 3.4% over the past 12 months as of July, as consumer prices moderated
To be sure, the latest Social Security COLA estimates are preliminary and subject to change
How inflation fares over the next two months will help determine the official size of the 2027 COLA
The Social Security COLA is calculated by comparing the current year’s third quarter inflation data for the months of July, August and September to the previous year’s third quarter data. The percentage increase of the average CPI-W for the third quarter from one year to the next determines the size of the COLA
