If realized, the increase would mark the largest annual adjustment since 2023, when benefits rose by 8.7% amid peak post-COVID inflation.
Two of the most widely cited projections have converged on a range of 3.5% to 3.6%, though the groups differ slightly. The AARP now forecasts a 3.6% COLA, up from its previous estimate of 3.5%. The Senior Citizens League (TSCL), which had last month projected 3.6%, has trimmed its estimate to 3.5%, as reported by CNBC and Livemint.
The estimates are based on inflation data for July and August. The AARP's projection follows the August Consumer Price Index, which showed the annual inflation rate for urban wage earners and clerical workers at 3.5%. The Senior Citizens League's slightly lower figure may reflect the most recent monthly inflation readings.
What the Increase Would Mean for Retirees
The projected increase would translate into a meaningful boost for retirees. According to the AARP, a 3.6% COLA would add roughly $75 a month to the average retired worker's benefit. The Social Security Administration reports that the average retired worker received $2,071 a month as of January. That would bring the typical monthly check to about $2,146.
The Senior Citizens League estimates a slightly smaller increase of about $67.90 per month, reflecting its 3.5% projection. Spousal benefits, which average about $986 a month for the roughly 2 million recipients, could cross the $1,000 threshold for the first time.
The exact dollar increase for any individual will vary, as the COLA is applied as a percentage of the current benefit. A $600 monthly benefit would rise by about $22, while a $1,500 benefit would increase by about $54.
Official Announcement Expected October 14
The official 2027 COLA will be determined by the Social Security Administration based on inflation data for July, August, and September. The September Consumer Price Index report is scheduled for release on Oct. 14, and the Social Security Administration is expected to announce the COLA that same day, according to multiple reports, including CBS News and Newsweek.
The calculation uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a subset of the broader Consumer Price Index. The final COLA will be the percentage increase in the average CPI-W for the third quarter compared with the same period a year earlier. The Bureau of Labor Statistics reported that the CPI-W rose 3.5% in the 12 months through August, with an index level of 328.481.
Analysts caution that the final figure could shift depending on September data. Mary Johnson, an independent Social Security and Medicare policy analyst, told CNBC that the estimate could change based on oil price trends, which have been volatile and have influenced inflation since the US-Iran conflict began in late February.
A Mixed Picture for Seniors
While a higher COLA would be welcome news for the more than 75 million people receiving Social Security and Supplemental Security Income, as reported by the Social Security Administration, advocacy groups warn that the increase may not fully cover the rising costs seniors face.
Shannon Benton, executive director of the Senior Citizens League, said in a statement that "seniors don't experience inflation as a percentage on a chart. They experience it at the grocery store, at the pharmacy, in their insurance premiums and when they pay the rent."
Benton added: "Frankly, it's infuriating that seniors must wait for a COLA to catch up with prices that have already driven up their grocery bills, housing costs, healthcare expenses and insurance premiums." She said that "a higher COLA is welcome, but seniors shouldn't have to lose purchasing power year after year before Washington acknowledges what they're experiencing."
The Senior Citizens League has pointed out that inflation and rising Medicare premiums are likely to erode a significant portion of the 2027 increase. Over the past decade, the COLA has ranged from 0% in 2016 to 8.7% in 2023, averaging about 3.1% per year, according to the Social Security Administration.