Social Security's cost-of-living adjustment could reach nearly 4% in 2027
Summary
Social Security benefits may rise by nearly 4% in 2027 because of faster inflation. This increase would help seniors and others keep up with rising prices, but the exact amount will depend on inflation in the next few months.Key Facts
- The estimated cost-of-living adjustment (COLA) for Social Security in 2027 is about 3.9%.
- The average monthly Social Security payment in January was $2,071; a 3.9% increase would add roughly $81.
- The COLA is based on inflation from July to September of the previous year, which means it looks backward at price changes.
- Inflation rose quickly recently, partly due to higher fuel prices linked to the Iran war.
- In 2026, the COLA was 2.8%, but inflation rates in early 2024 were higher, around 3.3% to 3.8%.
- A higher COLA could increase the financial problems of the Social Security trust funds, potentially making them run out of money sooner.
- Experts suggest limiting benefits for wealthy retirees to help fix some of Social Security’s money issues.
- The final 2027 COLA will be determined in October after reviewing inflation data.
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