Millions of Social Security beneficiaries could receive higher monthly payments in 2027, with current estimates pointing to a cost-of-living adjustment (COLA) of around 3.5% to 3.6%. AARP’s latest projection suggests that benefits could rise if inflation remains at current levels.
The estimate is not final. Social Security’s 2027 COLA will depend on inflation data for July, August and September, with the final figure expected to be announced by the Social Security Administration in October.
Estimate
AARP currently projects that the 2027 Social Security COLA could be about 3.6%. The estimate is based on available inflation data and projections for the remaining data needed to complete the annual calculation.
The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the inflation measure used to determine the Social Security COLA, increased 3.5% year over year in August 2026.
The August figure provides another indication of where the 2027 adjustment could land. However, one month of data cannot determine the final COLA. September’s inflation reading is also required before the Social Security Administration can complete the calculation.
Benefits
The potential increase would mean different dollar amounts for beneficiaries because the COLA is applied as a percentage of an individual’s existing benefit.
According to the figures cited by AARP, the average Social Security benefit was about $2,086 per month in July. If the final COLA were 3.6%, that benefit would increase by approximately $75 per month.
| Beneficiary | Estimated Monthly Increase |
|---|---|
| Average beneficiary | About $75 |
| Surviving spouse | About $70 |
| SSDI recipient | About $59 |
These are estimates rather than guaranteed payment amounts. The actual increase for each person would depend on their benefit amount and the final COLA percentage.
For example, a beneficiary receiving $2,000 per month would see an increase of $72 with a 3.6% COLA, bringing the monthly benefit to approximately $2,072.
Calculation
Social Security’s annual COLA is not determined simply by looking at the overall Consumer Price Index. Instead, the Social Security Administration uses the CPI-W.
The agency compares the average CPI-W for July, August and September with the average CPI-W for the same three months of the previous year. The percentage increase becomes the COLA, provided the calculation produces a positive adjustment.
This makes September’s inflation data particularly important for beneficiaries waiting to learn how much their payments could rise next year.
The process is designed to help Social Security payments keep pace with changes in consumer prices. It does not guarantee that the increase will fully cover every household’s higher expenses.
Inflation
Inflation remains a central factor behind the current COLA forecasts. Prices for everyday necessities can have a particularly noticeable impact on retirees and other people who depend heavily on fixed monthly income.
AARP has pointed to higher costs for categories such as groceries, energy, housing and healthcare. These expenses can account for a significant share of household budgets, particularly for older Americans.
Energy prices can also influence broader inflation because changes in oil prices can affect transportation, utilities and the cost of producing and moving goods.
Tariffs and changes in energy costs have also been cited as factors affecting consumer prices. However, the eventual Social Security adjustment will be determined by the CPI-W calculation rather than by any single factor driving inflation.
Outlook
If the current forecasts prove accurate, a 3.5% to 3.6% Social Security COLA would represent a noticeable increase from the 2.8% adjustment applied in 2026. A 3.6% adjustment would also be the largest annual increase since 2023.
Still, beneficiaries should not treat the current estimate as a guaranteed payment increase. Inflation data can change from month to month, and the September CPI-W reading will be needed to complete the calculation.
The official 2027 COLA is expected to be announced by the Social Security Administration in October after the necessary inflation data has been released. Until then, AARP’s projection and other estimates provide an indication, rather than a final answer, of what beneficiaries may receive.
For retirees and other Social Security recipients, the key figure to watch next is September’s CPI-W data. That report will help determine whether the current 3.5% to 3.6% forecasts remain on track.
