There's Good News and Bad News About Social Security's 2027 Cost-of-Living Adjustment (COLA)

Even though we're not even through the first quarter of 2026, a lot of people are already thinking ahead to 2027. For some, that means making career plans, moving plans, vacation plans, or financial plans.

If you're retired, your 2027 planning may be heavily influenced by what Social Security pays you each month. So you may be curious as to what next year's cost-of-living adjustment, or COLA, might look like.

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Let's get one thing out of the way. At this stage of the year, it's definitely too soon to predict next year's COLA with certainty.

Social Security COLAs are based on third quarter inflation data. And clearly, we're nowhere near that point yet.

However, there are initial estimates on 2027's Social Security COLA based on inflation readings to date. And those projections are a mixed bag.

The good news

In January, the Senior Citizen League, an advocacy group, projected that 2027's Social Security COLA will amount to 2.5%. Considering that that's a lower raise than what seniors received last month, that's not optimal.

However, in February, the group updated its projection and now thinks seniors on Social Security are in line for a 2.8% COLA in the new year. That would make 2027's COLA equivalent to this year's.

The bad news

A 2.8% COLA is better than a 2.5% raise. But even a 2.8% bump may not do seniors on Social Security a whole lot of good.

The Senior Citizens League reports that 57.6% of American seniors have given up at least one healthcare product or service in the past 12 months to conserve money. And in the absence of a more generous bump, many older Americans might struggle in the new year as well.

But the real issue isn't even small COLAs -- it's the way they're calculated.

Social Security COLAs are based on readings from the Consumer Price Index for Urban Wage Earners and Clerical Workers. But that index doesn't accurately capture the costs beneficiaries tend to face. And a big reason is that healthcare costs, which tend to eat up a lot of seniors' income, tend to rise faster than broad inflation.

Case in point: In 2026, Medicare's standard Part B premium rose 9.7%. That's well over three times this year's 2.8% COLA.

Unless lawmakers implement changes, future Social Security COLAs are likely to fail seniors -- even when they come in a lot higher than raises in the 2.5% to 2.8% range.

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