We Won't Know Social Security's 2027 COLA Until Oct. 14 -- but Here's 1 Thing We Know Already

If you're eager to know what Social Security's 2027 cost-of-living adjustment (COLA) will amount to, you don't have to wait too much longer. The Social Security Administration is expected to announce the upcoming COLA on Oct. 14. That's the date September's Consumer Price Index (CPI) gets revealed.

Social Security COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of CPI. Changes to the CPI-W for the months of July, August, and September all get factored into the COLA. When there's a year-over-year increase, benefits get to go up.

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But even though that announcement is still a few weeks away, there's one thing about the upcoming COLA you should keep in mind.

Don't expect your upcoming COLA to actually keep pace with inflation

Current estimates put the 2027 Social Security COLA in the 3.5% to 3.6% range. But whether the final number is smaller, greater, or right in line with those estimates, you shouldn't expect your 2027 raise to actually keep up with inflation.

The reason? Social Security COLAs have historically let seniors down.

Between 2016 and 2026, Social Security benefits lost 13.7% of their buying power, reports the Senior Citizens League, an advocacy group. And a big reason boils down to a major flaw in the COLA formula.

As mentioned above, COLAs are based on the CPI-W. But the CPI-W is not particularly reflective of the costs Social Security recipients face, since it focuses on wage earners, not retirees.

Now at some point, it's possible that lawmakers will change the way Social Security COLAs are calculated. But until that happens, you shouldn't expect your annual increases to fully keep up with rising costs.

Take steps to improve your financial picture in 2027

You may be hoping that a large 2027 COLA will give your income a nice boost and help you get a better handle on your expenses. But that's putting a lot of pressure on a raise that may let you down.

If you want to improve your finances in the new year, take a close look at your spending and try to identify opportunities to cut back. Also consider returning to work in some capacity if you don't have retirement savings and money seems perpetually tight.

Finally, consider relocating if there are parts of the U.S. where your Social Security checks might go further. These moves could have much more of an impact than your upcoming COLA, even if it ends up being surprisingly generous.

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