Social Security's 2027 COLA could be the biggest since 2023
New estimates call for a 3.6% to 3.8% benefit increase next year, although the final adjustment will depend on inflation readings released this summer.
Social Security recipients are still on track for one of the biggest cost-of-living increases in recent years, with new estimates pointing to a 3.6% to 3.8% benefit boost in 2027 after June's cooler-than-expected inflation report.
The 2027 COLA could rise by 3.6%, according to the AARP, while the Senior Citizens League is forecasting a 3.8% increase, unchanged from its prior month's forecast but down from its May estimate for a 3.9% boost.
As of January, the average retired worker received $2,071 a month in Social Security benefits, according to the Social Security Administration. A 3.6% to 3.8% COLA would increase the average monthly benefit by about $75 to $79, raising it to roughly $2,149 at the upper end of the range.
The COLA is intended to help benefits keep pace with inflation, but it is based on past price increases. The Social Security Administration calculates the adjustment using inflation data from July through September, meaning the final 2027 COLA could differ from current estimates based on recent Consumer Price Index reports.
The Social Security Administration will announce the 2027 COLA on Oct. 14, after the September CPI report is released, according to the AARP. The advocacy group said this is its first COLA projection ahead of the third-quarter inflation reports that will be used to calculate the official adjustment.
"Inflation is pretty unstable right now," Alex Moore, the statistician for the Senior Citizens League, told CBS News in an email.