A projected 3.5 percent cost-of-living adjustment (COLA) for Social Security in 2027 would provide a modest increase in monthly benefits, although the final figure will depend on inflation data that has not yet been released.
For the average beneficiary, a 3.5 percent COLA would translate to a monthly increase of $67.90, raising the average check from $1,940.08 to $2,007.98.
For example, someone currently receiving $2,000 per month would receive about $2,070 if the 3.5 percent COLA becomes the official rate.
The Social Security Administration is expected to announce the official 2027 COLA on October 14. The announcement is scheduled for the same day the Bureau of Labor Statistics releases the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September.
The government calculates the annual COLA using the average CPI-W readings for July, August and September. The July CPI-W came in at 3.4 percent, while the August figure, released on September 11, was 3.5 percent.
The September figure will complete the three-month period used to determine the final adjustment.
Pressure
A higher Social Security payment does not necessarily mean that beneficiaries will feel significantly better off financially.
According to the TSCL’s 2026 Senior Survey, 89 percent of older Americans said the 2026 COLA was too low and that their monthly benefit checks were falling behind inflation. The survey also found that 44 percent of seniors receive all of their income from Social Security.
TSCL Executive Director Shannon Benton said the timing of the remaining inflation data is an important factor in determining the final COLA.
“The biggest thing we’re watching with the COLA announcement coming are short-term shocks to the economy that push inflation way up or down in the next 30 days,” Benton said. “Of the three CPI-W figures used to calculate the COLA, two are already in.”
Formula
Benton also raised concerns about the way Social Security’s annual COLA is calculated.
The current formula uses the CPI-W, which measures changes in prices experienced by urban wage earners and clerical workers. However, older Americans may have different spending patterns from people who are still working.
“No matter if the COLA announcement comes in slightly higher or slightly lower than our prediction, seniors will probably end up disappointed in the long run,” Benton said. “The reality is that older Americans allocate their budgets differently than people still in the workforce, so inflation hits them differently. The CPI-W captures the experience of urban wage earners, which doesn’t represent the average senior’s budget.”
Healthcare, housing, food and other essential expenses can represent a significant share of household spending for retirees. As a result, the overall inflation measure used for the COLA may not always reflect how individual beneficiaries experience changes in living costs.
Adjustments
Benton is also calling on lawmakers to consider more frequent adjustments to Social Security benefits.
The current system generally provides a COLA once a year. This means that when prices rise during the year, beneficiaries typically have to wait until the next annual adjustment before a higher benefit amount takes effect.
“The COLA only happening once a year puts life on hold for a lot of seniors,” Benton said. “When prices rise, they don’t rise next January when your benefit check goes up. They rise right now. We need to consider CLAs that compound quarterly or monthly so seniors can keep up throughout the year when inflation comes in above Federal Reserve targets, like in 2026.”
More frequent adjustments would represent a change to the current system and would require consideration by lawmakers.
Outlook
The 3.5 percent figure is TSCL’s final prediction for the 2027 COLA ahead of the official announcement. It should not be treated as the confirmed rate.
The September CPI-W data will determine the final part of the calculation, after which the Social Security Administration will announce the official adjustment.
For beneficiaries, the final percentage will determine how much monthly payments increase in 2027. The new COLA is scheduled to take effect in January 2027.
