The first glimpse into the 2027 Social Security cost-of-living adjustment (COLA) suggests a smaller increase than the previous year. Based on current inflation patterns, seniors could see a 2.5% rise in their monthly benefits, down from the 2.8% adjustment enacted in 2026.
This modest projection comes from The Senior Citizens League, a nonpartisan advocacy group focused on older Americans’ financial wellbeing. While the official figure won’t be confirmed until October, the early prediction offers a preliminary look at what beneficiaries might expect.
Early COLA Forecast Shows a Softer Increase
Each year, Social Security payments adjust to reflect the pace of inflation, offering some protection against rising living costs. The 2027 COLA estimate (first published this week by The Senior Citizens League) pegs the increase at 2.5%. If accurate, that would represent a 0.3 percentage point dip compared to the previous year’s 2.8% increase.
According to the League, this would translate into an average monthly boost of $52 per recipient, bringing the average retirement benefit up to $2,123. Though not insignificant, such an increase would be in line with the historical average of COLA adjustments over the past few decades.
While these early projections help retirees plan ahead, financial experts are urging caution. According to Michael Ryan, founder of MichaelRyanMoney.com, these early numbers are often unreliable. “The COLA formula relies on Q3 inflation data (July-September CPI-W), and we haven’t even hit February yet,” Ryan told Newsweek. He pointed out that early predictions for the 2026 COLA also fluctuated throughout the year before the official number settled at 2.8%.
Likewise, Kevin Thompson, CEO of 9i Capital Group, said the estimate should be treated as tentative. “There is still a meaningful amount of data that needs to be processed, and the missing October CPI data alone could materially change the calculation,” Thompson told the same source.
Real-World Impact May Be Offset by Rising Medicare Costs
While a 2.5% boost may seem beneficial on paper, experts note that ongoing increases in Medicare premiums could offset much of the gain. According to Michael Ryan, Medicare Part B premiums rose 9.7% this year, far outpacing the 2.8% COLA for 2026. As he explained to Newsweek, “Even if seniors get 2.5 percent in 2027, Medicare Part B premiums already ate most of 2026’s increase.”
This ongoing imbalance, Ryan argues, highlights a structural flaw in the way COLA is calculated. The formula currently uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is based on spending habits of the general working population. Ryan and others suggest that using the CPI-E, an index that better reflects seniors’ actual spending patterns, especially for healthcare, might result in a more accurate cost adjustment. According to Ryan, had the CPI-E been used for 2024, the COLA would have been 4% instead of 3.2%.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, added that while inflation has cooled compared to previous years, the final COLA figure remains highly dependent on economic conditions throughout the year. “We still have 10 more months of data to take in before the final adjustment is announced,” Beene said. For now, the early estimate serves as a cautious signal: while Social Security checks may continue to rise in 2027, much of the real-world benefit could be eroded by other costs.
