During the first three months of 2026, the consensus seemed to be that retirees wouldn’t get more than a 3% bump in Social Security benefits
in 2027.
That was the expectation of Martha Shedden, co-founder and president of the National Association of Registered Social Security Analysts. However, the most recent consumer price index seems to indicate a larger COLA could be forthcoming. “With each passing week, sometimes daily, we are hearing hints of a higher COLA coming in 2027,” she says. “It is not surprising, given the increase in energy costs and everyday expenses we’re experiencing.”
The COLA is an annual cost-of-living adjustment in Social Security benefits and is based on the consumer price index. The CPI is a common measure of inflation and calculated monthly by the federal Bureau of Labor Statistics. The April CPI shows annual inflation rose to 3.8%, the highest level since 2023. As a result, some experts are revising their 2027 Social Security COLA predictions.
The Senior Citizens League, which regularly releases estimates, has adjusted its 2027 COLA projection is 3.9% based on the most recent economic data. The organization uses the consumer price index, Federal Reserve interest rate and unemployment rate when making its projections, and it previously predicted a 2.8% COLA during the first three months of 2026.
[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.
The CPI-W can vary from the CPI for all goods. In April 2026, the CPI for all goods was 3.8% while the CPI-W was 3.9%. Both are up from 3.3% in March.
In 2025, the average annual CPI-W for the third quarter was 2.8%. That translated into a 2.8% increase in Social Security benefits beginning in January 2026. Until recently, many experts expected inflation to decline this year, meaning next year’s COLA would be lower.
Here are what some economists have predicted for inflation in 2026:
— 2.3% to 3.3%, according to the Federal Reserve Board
— 2.3%, according to Goldman Sachs Research
— 3.6%, according to BMO Capital Markets Economic Research
— 2.6%, according to Morgan Stanley
— 3.2%, according to J.P. Morgan
Some of these projections are for the entire year, while others are for the latter part of 2026. What’s more, some of these estimates are based on the price index for personal consumer expenditures, which can vary slightly from the CPI. Almost all were developed prior to the start of the war with Iran and the onset of rising fuel prices, which have contributed significantly to recent inflation.
“The BLS indicates that key drivers are due to geopolitical conflict with energy gains of 17.9% and the price of gasoline up 28.4%,” Shedden says. “The repercussions of higher transportation costs, due to these increases, has a domino effect on the costs of goods and services in many sectors.”
[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 the conflict in Iran, tariffs, tax cuts and the labor market.
For instance, the One Big Beautiful Bill Act was arguably the most impactful legislation passed in 2025. “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 this 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.
“For retirees living on fixed incomes, the costs that matter most, especially healthcare, housing, utilities, and insurance, continue to rise faster than prices in the rest of the economy, silently wrenching seniors dry,” said Shannon Benton, executive director of The Senior Citizens League, in a press release. “This makes the national affordability conversation even more important than ever.” The Senior Citizens League estimates that Social Security benefits have lost 13.7% of their buying power since 2016.
A change to the CPI-E could increase the annual Social Security COLA 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 in 2025 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.
For 2026, monthly Medicare Part B premiums went up 9.7% at a time when the COLA only increased 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.
More from U.S. News
Did 2025 Live Up to Your Retirement Expectations?
What Is the Social Security Tax Limit?
Will the 2026 Social Security COLA be Enough to Cover Seniors’ Rising Costs?
What Is the Social Security COLA for 2027? originally appeared on usnews.com
Update 05/12/26: This story was published at an earlier date and has been updated with new information.
