2027 Social Security COLA estimates rise to 3.4-3.6% following August inflation data

Key points

• The 2027 COLA is projected to be between 3.4% and 3.6%, exceeding the 2.8% increase for 2026.
• The COLA is calculated using the Bureau of Labor Statistics' CPI-W data for July, August, and September.
• August CPI inflation was 3.4% year-over-year, while CPI-W was 3.5%.
• A 3.5% COLA would raise the average monthly benefit from $1,940.08 to $2,007.98, an increase of $67.90.
• The final COLA will be announced after the September CPI data is released on October 14.

Background

In August 2026, earlier estimates suggested a 2027 COLA of around 3.5-3.6%, potentially adding about $75 to the average retiree's monthly check. The 2026 COLA was set at 2.8%. Social Security payments are distributed on Wednesdays based on birthdate, with SSI payments typically issued on the first of the month. Long-term funding concerns for the Social Security trust fund, with a projected shortfall around 2032, remain a policy issue.

Why it matters

The COLA directly affects the income of millions of retirees who rely heavily on Social Security for their financial stability. A higher COLA helps offset rising costs of living, particularly in healthcare, housing, and utilities, which disproportionately impact older Americans. Accurate COLA estimates allow beneficiaries to plan their budgets more effectively in the coming year.

What to watch

The final 2027 COLA will be determined after the Bureau of Labor Statistics releases the September CPI inflation data on October 14. Any significant shifts in inflation during September could alter the final percentage, though current estimates suggest the increase will remain in the mid-3% range.