COLA Outlook: Higher Social Security Checks Spark Fresh Debate on Calculation

New inflation data point to a 3.6% COLA for 2027, boosting the average retiree’s check by about $75, but experts warn that even a larger COLA may not fully cover rising costs like food, energy and healthcare. Washington is weighing two major proposals to change how COLA is calculated: switching to the CPI-E, which reflects older Americans’ spending patterns, or adopting a flat-rate COLA that caps gains for higher-benefit retirees. Both could affect Social Security solvency, with estimates suggesting CPI-E could widen the long-term shortfall by about 11% and shorten the trust fund’s runway toward 2032 if adopted. Some note CPI-E won’t always yield higher increases (energy prices can tilt results), while others argue the flat-rate plan would sharply reduce benefits for many even as it aims to improve solvency. The debate underscores the tension between protecting beneficiaries’ purchasing power and ensuring the program’s finances long-term.