Social Security retirees are now on track for the biggest cost-of-living adjustment in four years, with early estimates pointing to a 2027 benefit increase that could top 4%. Mary Johnson is putting the number at 4.2%, up sharply from the 1.7% increase she predicted earlier this year.
The new estimate is drawing attention because retirees are watching for any sign of relief after inflation reached its worst level in three years. A COLA above 4% would mean larger monthly checks for millions of older Americans, and it would mark a sharp turn from the more muted increases many have seen in recent years.
Johnson is not alone in seeing a stronger adjustment ahead. The Senior Citizens League is projecting a 3.9% COLA, after previously calling for a 2.8% increase. If the higher end of those estimates holds, the 2027 COLA would be the fourth largest in 36 years and the biggest raise in four years, even if it still falls short of the 5.8% increase Social Security delivered in 2009 and the 5.9% and 8.7% jumps that came after the pandemic.
The numbers are still early, though, and that is where the story gets complicated. The COLA is based on year-over-year changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, a monthly measure released by the Bureau of Labor Statistics, but only the CPI-W data for July, August and September count in the official calculation. Inflation has been running hotter, yet conditions could change before those final months are in the books, which is why the current projections may not pan out.
The official 2027 COLA will not be released until October, after the third-quarter data are available. Until then, retirees like Johnson are left with a number that is meaningful but provisional: a possible 4.2% increase that could prove to be the largest Social Security raise in four years, or a forecast that gets trimmed once the last three months that matter are finally counted.
