A Key Clue About Social Security's 2027 COLA Should Be Revealed This Week

There are many older Americans today who are struggling to get by on their Social Security benefits.

Granted, those benefits were never meant to sustain retirees without additional income. But the reality is that plenty of people struggle to save for retirement. And in a situation like that, Social Security benefits become a lifeline, as do the annual cost-of-living adjustments (COLAs) those checks are eligible for every year.

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At this point, many seniors are eager to know what the 2027 COLA will amount to. And they won't have to wait all that much longer, since an official announcement should arrive in mid-October. But later this week, seniors on Social Security should get a key clue about their upcoming COLA they won't want to miss.

A big piece of data should soon arrive

Social Security COLAs are based on third quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). We already have numbers for July, but August's reading is scheduled to be released on Sept. 11.

Once that data comes out, we can expect experts to update their Social Security COLA forecasts accordingly, or confirm whether their current projections remain valid. As of now, the nonpartisan Senior Citizens League, an advocacy group, expects 2027's Social Security COLA to be 3.6%, while independent analyst Mary Johnson is calling for a 3.4% boost.

Have realistic expectations

If you're on Social Security, you may be eager to find out what your 2027 raise will look like. But one thing you must realize is that your upcoming COLA probably won't improve your financial situation all that much, even if that raise is fairly generous.

Any time there's a larger COLA than average, it comes at the cost of higher inflation. So what you gain in the form of a more significant boost to your Social Security checks, you lose in the form of more expensive groceries, gas, and other essentials.

This doesn't mean that the number isn't important. But if you're struggling to cover your costs across the board, don't assume that a large COLA in 2027 will make your expenses easier to manage. You may want to take other steps to improve your situation, like reducing expenses to the most reasonable extent possible or pursuing some type of part-time work arrangement.

If you manage to earn a few hundred dollars a month, those wages will most likely put more money in your pocket than the upcoming COLA by far, thereby actually helping you better keep up with your bills.

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