Each year, Social Security beneficiaries receive a cost-of-living adjustment, known as a COLA. In 2026, the COLA is bumping up Social Security checks by 2.8%. And while it may seem early to start thinking about 2027, some financial experts are already making predictions about what that year might bring.
“We’re not anticipating anything greater than 3% at the highest,” says Martha Shedden, co-founder and president of the National Association of Registered Social Security Analysts.
Even that might be optimistic. Some economists are predicting inflation will drop closer to 2% by the end of 2026, meaning a smaller Social Security COLA for retirees in 2027.
[READ: When to Expect Your Social Security Checks.]
Inflation Predictions for 2026
The Social Security COLA is based on the consumer price index for urban wage earners and clerical workers. Known as the CPI-W, this index is based on the price of a basket of goods and services commonly purchased by consumers. The COLA is based on the average annual CPI-W from the third quarter of the previous year.
In 2025, the average annual CPI-W for the third quarter was 2.8%. That means Social Security beneficiaries will see a 2.8% increase in their benefits beginning January 2026. However, many experts expect inflation to decline in 2026, meaning the following year’s COLA would be lower.
Here are what some economists are currently predicting for inflation in 2026:
— 2.6%, according to a November survey of 42 professional forecasters conducted by the National Association for Business Economics
— 2.3% to 2.5%, according to the Federal Reserve Board
— 2.59%, according to Goldman Sachs Research
— 2.3%, according to BMO Capital Markets Economic Research
The NABE and Federal Reserve projections are for the entire year, while the Goldman Sachs and BMO estimates are for September 2026 and the third quarter of 2026, respectively. Some of these estimates are based on the price index for personal consumer expenditures, which can vary slightly from the CPI.
“The bottom line is that inflation will be 2.4% to 3%,” Shedden says.
And based on current projections, it looks likely that inflation — and the 2027 Social Security COLA — will be closer to the low end of that estimate.
[Read: 5 Reasons to Take Social Security at Age 62]
Factors That Could Affect the 2027 Social Security COLA
The actual Social Security COLA for 2027 could be influenced by factors such as tariffs, tax cuts and the labor market.
For instance, the One Big Beautiful Bill Act was arguably the most impactful legislation passed this year. “We think it’s going to be inflationary long-term because of the tax cuts,” says Corey Briggs, director of wealth planning at the Plaza Advisory Group with Steward Partners in St. Louis.
The bill included an additional senior deduction, which Briggs describes as “huge tax savings,” as well as expanded the state and local tax deduction and extended the qualified business income deduction. These, along with declining interest rates, could spur spending, which in turn, drives inflation.
Meanwhile, the role of artificial intelligence in the job market could also have an effect, Briggs says. If AI is able to replace workers, that could mean higher unemployment and less money flowing into the economy, which may slow inflation.
“There are obviously so many unknowns,” Shedden says. She thinks tariffs, trade and the labor market could all play a role in next year’s inflation rate and the 2027 Social Security COLA.
[READ: When to Expect Your Social Security Checks.]
Changing the CPI Could Change the COLA
Changing the CPI used to calculate the Social Security COLA could also affect how much more retirees receive in benefits in 2027.
There are multiple versions of the CPI, and some argue that the CPI-W doesn’t adequately reflect the spending habits of those receiving Social Security.
“Older Americans aren’t buying many products,” Shedden says. “They are spending a disproportionate amount of their money on health care and prescriptions.”
However, medical care services are only a small part of the CPI-W. Instead, some argue that the CPI-E, which was designed to track the expenses of the elderly, would be a more appropriate measure for the Social Security COLA.
The COLA could increase by 0.2 percentage points on average, according to Briggs. For instance, if the CPI-E were used, the 2026 COLA might have been 3% rather than 2.8%.
The Social Security Expansion Act was introduced earlier this year to make that change, among other amendments to the Social Security program. Not everyone thinks it will see action by Congress, though.
“I don’t think that has traction because we’re already losing money,” says Steve Parrish, professor of practice and a scholar in residence at the Cary M. Maguire Center for Ethics in Financial Services at The American College of Financial Services.
With the Social Security trust funds facing depletion in less than a decade, Parrish doesn’t think Congress will change the CPI in a way that will increase the annual COLA. Moving to a chained CPI is more likely, he says, noting that was the version of the CPI used for calculations in the Tax Cuts and Jobs Act of 2017.
The chained CPI takes into account substitutions that consumers might make — such as buying chicken when beef is expensive, Briggs explains — and it is typically lower than the CPI-W. Using a chained CPI would likely result in a slightly lower COLA, but seniors may not have to worry about that change next year. There has been talk about moving to a chained CPI for years, and no action has been taken yet.
Medicare Increases Could Offset COLA
Regardless of the exact amount of the 2027 Social Security COLA, there is a good chance that much of it will go to pay for increases in Medicare costs.
“You’re really getting hit two ways with medical,” Parrish says. The CPI-W doesn’t accurately reflect senior health care costs, and seniors also have to contend with Medicare premiums that are increasing at a pace that far exceeds the COLA.
In 2026, monthly Medicare Part B premiums are going up 9.7% at a time when the COLA is only increasing Social Security benefits by 2.8%. Whatever the Social Security COLA in 2027 ends up being, seniors should be prepared for a large portion of it to be absorbed by rising health care costs.
Government Shutdown Puts Wrinkle in Inflation Data
While estimates from other organizations can be a helpful barometer for where inflation is headed, only the official CPI number from the Bureau of Labor Statistics matters when it comes to the Social Security COLA.
The BLS issued its latest numbers in December, finding that the annual CPI was 2.7% as of November 2025. However, that number is based on partial data with only information for gasoline, new and used vehicles, included in the agency’s CPI news release.
The October and November 2025 data values are “not available due to the 2025 lapse in appropriations,” the BLS noted in its release. The lapse in appropriations refers to a federal government shutdown that occurred from Oct. 1 to Nov. 12.
While Congress eventually passed an appropriations bill to reopen the government, that funding will expire on Jan. 30, 2026. If there is another shutdown, it could affect the collection of future data.
Whether ongoing government lapses could cause a problem with future CPI calculations remains to be seen. But the latest shutdown did mean that at least one organization that typically forecasts the Social Security COLA a year in advance opted against it. The Senior Citizens League typically publishes a forecast in late fall, but says it will wait until January this year.
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What Is the Social Security COLA for 2027? originally appeared on usnews.com
