Multiple organizations have released preliminary estimates for Social Security’s 2027 cost-of-living adjustment following the release of July inflation data on Wednesday. Independent policy analyst Mary Johnson estimates the adjustment could reach 3.4%, representing a decrease from her previous forecast of 3.7% issued the prior month. The Senior Citizens League projects a 3.6% adjustment, while AARP estimates 3.5%, which would translate to approximately $73 additional monthly income for the average retired worker.
The downward revision reflects moderating inflation trends. Johnson noted that inflation has cooled from peaks earlier in the year, prompting reductions in her estimates. The 3.4% to 3.6% range remains above the long-term average adjustment of approximately 2.6%, though it aligns more closely with the past decade’s average of 3.1%. Recent years saw notably elevated adjustments during inflationary periods, including 5.9% in 2022 and 8.7% in 2023.
The adjustment is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which showed a 3.4% increase over the past 12 months as of July. The broader consumer price index similarly rose 3.4% year-over-year. The Social Security Administration will announce the official COLA for the upcoming year in October.
All current estimates remain preliminary and subject to change based on inflation data through September. The COLA is determined by comparing third-quarter inflation figures—July, August, and September—between consecutive years. How inflation develops over the remainder of the calculation period will ultimately determine the precise adjustment amount for 2027.
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