Recent inflation data suggests a potential increase in Social Security COLA for 2027, with estimates rising to 4.2%. The Senior Citizens League also adjusted its projection to 3.9%. Inflation has significantly impacted living costs, affecting the purchasing power of benefits since 2016.
Following the latest inflation data, expectations are rising for a slightly higher increase in the Social Security cost-of-living adjustment (COLA) in 2027.
Mary Johnson, an independent Social Security and Medicare policy analyst, said, as reported by CNBC, that the Social Security COLA may increase to 4.2% amid “sharply rising” gasoline, energy and fresh produce prices. This projection is up from the 3.2% COLA estimate for 2027 that Johnson had forecast last month.
Report further stated, the nonpartisan advocacy group ‘Senior Citizens League’ has raised its 2027 COLA projection to 3.9%, compared with the 2.8% increase it had estimated in April.
The forecast is based on April consumer price index (CPI) data released on May 13, which showed inflation climbed 3.8% over the past year — the sharpest rise since May 2023 — driven by stronger-than-expected increases in the cost of several goods and services.
How the COLA increase will reflect on your cheque?
As per Motley Fool, assuming middle ground estimate of 3% for the 2027 COLA increase, the average retired worker could receive a monthly Social Security benefit hike of more than $62.
In comparison, the average worker with disabilities and the average survivor beneficiary would see their monthly checks each climb by approximately $49 in 2027.