WASHINGTON, Aug. 13 (Senior Newspaper) — Social Security beneficiaries are facing a preliminary 2027 cost-of-living adjustment, or COLA, of between 3.2% and 3.6% after new federal inflation data showed prices rising more slowly in July than in June.
The estimates are not final. The Social Security Administration will calculate the adjustment using inflation readings for July, August and September. The agency is expected to announce the official COLA on Oct. 14, after September data are released. Payments reflecting the adjustment are expected to begin in January 2027.
How the estimates differ
The Committee for a Responsible Federal Budget, a nonpartisan policy organization, projects a 3.2% increase, the lowest of the major estimates cited after the July data. The group said the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, was unchanged in July and had risen 3.4% over the previous year.
AARP estimates a 3.5% COLA. The organization described the figure as its first forecast before the third-quarter inflation reports are complete.
The Senior Citizens League, an advocacy group, projects a 3.6% increase, down from its earlier 3.8% forecast. Independent Social Security and Medicare policy analyst Mary Johnson estimates a 3.4% adjustment, down from 3.7% the previous month and 4.7% in June.
The range matters because the COLA is applied to monthly benefits received by millions of retired workers and other Social Security beneficiaries. It also affects the income available for household expenses such as food, energy, housing and health care.
What the increase could mean for benefits
The Senior Citizens League calculated that a 3.6% increase would raise an average monthly benefit from $1,937.53 to $2,007.28, an increase of $69.75. That calculation is an illustration of its estimate, not an official benefit notice.
Individual increases would vary because the COLA is applied to each beneficiary’s existing payment. The preliminary estimates also do not establish how much purchasing power beneficiaries will gain: That depends on how prices for goods and services change during the period before the adjustment takes effect.
Why the forecast keeps changing
The July CPI-W reading rose 3.4% over the prior 12 months, compared with 3.5% in June, according to the Bureau of Labor Statistics. The moderation contributed to lower forecasts from several analysts and organizations.
But two months of relevant inflation data remain. Rich Johnson, AARP’s vice president for financial security, said food and energy prices could create uncertainty in the forecast. “This is not set in stone,” he said.
Shannon Benton, executive director of the Senior Citizens League, also pointed to volatility. The group said inflation had moved from 2.2% at the start of the year to 4.4% in May before falling to 3.5% in June.
Mary Johnson said the moderation in inflation had lowered her estimate from earlier peaks. Her forecast, like those from AARP, the Senior Citizens League and the Committee for a Responsible Federal Budget, remains subject to the August and September CPI-W readings.
The Bureau of Labor Statistics releases the inflation data, while the Social Security Administration determines and announces the final COLA. Until that announcement, the competing forecasts are indicators of where the adjustment may land—not the increase beneficiaries will ultimately receive.
