Inflation Has Risen to 3.8%. Here's What That Means for Your 2027 Social Security COLA
Key Points
Inflation is rising, largely due to higher energy costs.
Social Security COLAs are based on inflation, so an above-average boost could be on the way.
The Social Security Administration will announce the official 2027 COLA in October.
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If you've made any visits to the gas station lately, you're probably not surprised to hear that inflation has been increasing over the last several months. In April, it hit 3.8% on a year-over-year basis, up from 3.3%, largely driven by higher energy costs.
That means higher prices for consumers today, but it may also foreshadow a higher 2027 Social Security cost-of-living adjustment (COLA) for seniors. Here's what we know so far.
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How the Social Security Administration calculates COLAs
The Social Security Administration bases its COLAs on changes in average third-quarter inflation data as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is a measure of the cost of a basket of common goods and services over time.
It sounds more complicated than it is. The government takes the CPI-W numbers for July, August, and September of the current year, averages them, and compares them to the average for the same months from the year before. The percentage increase is the COLA. For example, the third-quarter average for 2025 was 2.8% higher than the third-quarter average for 2024, so seniors got a 2.8% Social Security COLA in 2026.
Since the CPI measures changes in consumer prices over time, COLAs are determined by inflation. When inflation is high, COLAs tend to be larger, and when inflation is lower, COLAs are smaller.
What this means for the 2027 Social Security COLA
With inflation rising, many are predicting an above-average Social Security COLA for next year. The Senior Citizens League (TSCL), a nonpartisan senior group, recently raised their COLA estimate from 2.8% to 3.9% following the latest CPI report.
However, nothing's set in stone yet. The Social Security Administration won't announce the official 2027 COLA until Oct. 14, 2026. That's the day the government will release the September CPI number.
There are still several months between now and then, and everything hinges on what happens to inflation. If rates continue to rise or even remain steady, seniors will get an above-average benefit boost next year. A 3.9% increase would add about $81 to the $2,081 average monthly benefit as of April 2026. But if inflation falls, the COLA might be lower than current estimates indicate.
Once we know the official COLA percentage, you'll be able to estimate your 2027 benefit by adding the COLA percentage to your current checks. In December, you'll also get an official COLA notice from the Social Security Administration giving your exact benefit increase for next year. Then, you can start designing your 2027 budget.
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