Social Security's 2027 COLA Forecast: A Modest Rise That May Fall Short for Seniors

While the recently announced 2.8% Social Security cost-of-living adjustment (COLA) for 2026 offered some relief, a new forecast for the following year is already tempering expectations. Advocacy group The Senior Citizens League has issued its first 2027 COLA projection, estimating a 2.5% increase based on preliminary inflation data.

This early estimate, if it holds, would be slightly below the 2026 adjustment and notably lower than the elevated hikes seen in the immediate post-pandemic years. However, experts caution that the final figure, calculated using third-quarter inflation data, remains highly uncertain this far in advance. Such monthly projections are intended as a rough guide for budget planning but are subject to significant revision.

The core issue, analysts note, isn't just the size of any single COLA but a structural flaw in the calculation. Benefits are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which often fails to accurately reflect the spending patterns of retirees, who allocate more of their income to healthcare and housing. This disconnect has historically eroded the purchasing power of Social Security benefits over time.

"This forecast underscores a persistent problem," said Michael R. Chen, a senior policy analyst at the Economic Security Institute. "Even with annual increases, many beneficiaries find their checks buy less each year. It highlights the critical need for personal retirement savings as a supplement."

For current retirees concerned about income sufficiency, financial advisors commonly suggest exploring part-time work, leveraging home equity, or renting out spare rooms. For those still in the workforce, the recurring gap between COLA and actual living costs serves as a stark reminder to prioritize and maximize retirement savings.

What Readers Are Saying

Linda P., 68, retired teacher, Florida: "It's demoralizing. You plan your budget around a certain lifestyle, and these adjustments never seem to cover the real increases in my prescriptions and property taxes. It feels like we're being slowly squeezed."

Robert G., 55, financial planner, Ohio: "While the projection is useful for awareness, it's far too early to panic. The takeaway should be proactive planning. Relying solely on Social Security is a risky strategy, regardless of the COLA percentage."

David K., 72, retired veteran, Arizona: "It's a broken system, pure and simple. They use the wrong metric to calculate our raises, and then act surprised when seniors struggle. This isn't just 'bad news'—it's a policy failure that's hurting millions."

Anita S., 61, part-time consultant, Oregon: "This is why I haven't fully retired. The COLA is never enough. My advice to younger friends is to save aggressively and consider your Social Security benefits as a foundation, not the entire structure."

This analysis is based on public data and projections from The Senior Citizens League. The final 2027 COLA will be determined by the Social Security Administration in October 2026.