WASHINGTON, Aug. 13 (Senior Newspaper) — Preliminary estimates for the 2027 Social Security cost-of-living adjustment now range from 3.2% to 3.6%, as new inflation data show prices rising more slowly than they did earlier this year.
The competing forecasts offer different possible outcomes for Social Security beneficiaries, including retired workers and people receiving disability benefits. The final adjustment will not be known until the Social Security Administration reviews additional inflation data.
What are the latest estimates?
The Committee for a Responsible Federal Budget projects a 3.2% increase, the lowest of the estimates reported after the July data. The group said the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, was flat in July and up 3.4% from a year earlier.
AARP projects a 3.5% increase. The organization described the figure as its first forecast issued before the government releases the remaining third-quarter inflation reports.
The Senior Citizens League projects a 3.6% increase, down from its earlier 3.8% estimate. Independent Social Security and Medicare policy analyst Mary Johnson estimated a 3.4% increase, down from 3.7% in July and 4.7% in June.
Those forecasts are not official government figures. They are estimates based on inflation data and can change as new readings are released.
Why did the estimates change?
The Bureau of Labor Statistics reported that CPI-W rose 3.4% over the 12 months through July, down from 3.5% in June. The July reading indicated some moderation in inflation, leading several forecasters to lower their projections.
Inflation has been volatile this year, according to Shannon Benton, executive director of the Senior Citizens League. Benton said the measure started the year at 2.2%, rose to 4.4% by May and then fell to 3.5% in June.
Rich Johnson, AARP’s vice president for financial security, said food and energy prices could still affect the forecast.
“There’s a lot of uncertainty about how food and, especially, energy prices will play out over the next two months,” Johnson said. “This is not set in stone.”
How is the official COLA determined?
The Social Security Administration uses CPI-W readings from July, August and September to calculate the annual adjustment. The Bureau of Labor Statistics releases the inflation data used in that process.
The Social Security Administration is expected to announce the official 2027 COLA on Oct. 14, after September inflation data become available. Benefits reflecting the adjustment are expected to begin in January 2027.
Until then, the August and September CPI-W readings could push the final percentage above or below the current estimates. Mary Johnson said the moderation in inflation had lowered her forecast from higher levels earlier in the year.
What could the estimates mean for monthly benefits?
The dollar effect depends on the size of each beneficiary’s current payment. The Senior Citizens League calculated that a 3.6% increase would raise an average monthly benefit by $69.75, from $1,937.53 to $2,007.28, if that estimate became the official adjustment.
That calculation is an illustration based on the league’s estimate. It does not represent the payment change for every beneficiary. Individual benefits vary, and the final adjustment may be different.
