Benefits could shore up 3.8% if the first estimates for 2027 Social Security Cost-of-Living Adjustment (COLA), as per The Senior Citizens League. Though these are just initial estimates, with COLA number yet to be announced publicly, and slated for an October 14 reveal.
The higher Social Security payments based on the new COLA will start in January 2027, according to AL.com. The basis for COLA calculations is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The July August and September inflation data, which comprises the 3rd quarter of the financial year, is used to calculate the inflation.
How 2027 COLA is calculated
It compares the average CPI-W for July-September 2026 with the average CPI-W for July-September 2025, according to AL.com. The difference between those two periods becomes the 2027 COLA percentage. July 2026 is the first month that counts toward calculating the 2027 COLA. The July CPI-W inflation report will be released on August 12, 2026, according to Yahoo Finance.
After the July inflation data is released, experts will have a better idea of what the final COLA could be. However, the estimate can still change because the August and September inflation numbers are not available yet. If the current 3.8% estimate becomes official, it would be 1 percentage point higher than the 2026 COLA of 2.8%, according to AL.com.
How much could payments rise
A 3.8% COLA would be higher than the average increase seen over the past 50 years. However, it would still be lower than the very large COLA increases during the COVID-19 pandemic. The average retired worker currently receives about $2,026 per month in Social Security benefits.
Also read: New York becomes first US state to freeze large data center construction over rising power costs and water use concerns
If the COLA is 3.8%, the average monthly payment would rise to about $2,103. That means the average retiree would receive about $77 more every month. Even if benefits increase, many seniors may not feel much relief because higher COLA usually comes with higher inflation, according to Yahoo Finance. This means the extra money could be spent on higher prices for food, housing, transportation and other daily expenses.
Why seniors are worried
TSCL Executive Director Shannon Benton said inflation is rising at a time when many seniors already struggle to pay for basic needs. Benton said many older Americans are finding it difficult to afford food, housing and transportation, according to AL.com. She also said some seniors are skipping doctor’s appointments because they cannot afford them. According to TSCL, Social Security benefits are already about $675 per month lower than the average cost of living.
TSCL said 44% of seniors depend completely on Social Security for their retirement income. TSCL’s 2026 Senior Survey found that 57% of seniors live on less than $2,000 a month. The same survey found that 13% of seniors live on less than $1,000 a month. TSCL estimates that about 5.6 million seniors live below the federal poverty line.
Recent Social Security COLA history
Benton urged Congress and the President to increase Social Security benefits so seniors can better meet their daily living costs. She also referred to President Franklin D. Roosevelt’s original vision for Social Security, saying the program was created to help protect Americans during times of inflation and economic hardship, according to AL.com.
Recent COLA history
- The 2025 COLA was 2.8%
- The 2024 COLA was 2.5%
- The 2023 COLA was 3.2%
- The 2022 COLA reached 8.7%, the highest in decades.
- The 2021 COLA was 5.9%
If the current estimate holds, the 2027 COLA of 3.8% would be higher than the last two yearly increases, but much lower than the pandemic-era peak of 8.7%.
