Social Security's Biggest Announcement of the Year Is Just 1 Month Away

Millions of retired Americans today collect Social Security and rely on those monthly benefits to make ends meet. And that's why this year's cost-of-living adjustment (COLA) was such a disappointment.

In January, Social Security benefits rose 2.8% But inflation has outpaced that raise for much of the year, leaving seniors scrambling.

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Many Social Security recipients are hoping there's a larger COLA in store for 2027. And at this point, they won't have to wait much longer to get an answer. That's because the big COLA reveal is now officially just one month away.

Stay tuned on Oct. 14

Social Security COLAs are based on third quarter changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). At this point, we have CPI-W data for the months of July and August. But September's reading won't come out until Oct. 14.

Once that final piece of the puzzle arrives, the Social Security Administration (SSA) can calculate an official COLA. The SSA should also be able to announce other program updates on Oct. 14, including a new earnings-test limit for beneficiaries who work while receiving Social Security, the program's maximum monthly benefit for 2027, and the upcoming wage cap, which impacts workers who pay into the program.

What 2027 COLA estimates look like right now

Current COLA estimates put next year's range in the mid-3% range. The Senior Citizens League, an advocacy group, estimates next year's COLA at 3.5%, as does independent Social Security analyst Mary Johnson.

AARP's COLA forecast is a bit more optimistic. The group puts the 2027 COLA at 3.6%.

Either way, it's looking like next year's Social Security COLA will be considerably larger than the 2.8% raise that came through earlier this year. That's something Social Security recipients are likely to be happy about.

The reality, though, is that COLAs are a largely neutral event since they're tied to inflation directly. In other words, seniors shouldn't expect a larger COLA in 2027 to improve their finances, since that raise comes at the expense of higher inflation. COLAs are meant to match inflation, not beat it.

Of course, things could still shift in either direction in September, resulting in an ultimate COLA that's higher or lower than the mid-3% range. But unless there's a truly drastic change, it's likely that the upcoming COLA will surpass 2.8% by a pretty decent margin. And that's something that will probably make a lot of older Americans happy.

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