Social Security beneficiaries — about 70 million Americans, including retirees, disabled workers, and surviving family members — are projected to receive a larger cost-of-living adjustment (COLA) in 2027 than the increase granted this year, although estimates have ticked slightly lower following cooler inflation data in July.

By law, the annual Social Security COLA is calculated using consumer price index (CPI) data from the Bureau of Labor Statistics (BLS) covering the months of July, August, and September. The calculation relies on a specific variant of the CPI dataset known as CPI-W, which tracks the spending patterns of urban wage earners and clerical workers. The adjustment is designed to increase beneficiary payments in response to rising living costs. For many retirees, the annual adjustment carries outsized financial weight: according to SSA data, roughly 40% of elderly beneficiaries rely on Social Security for at least half of their household income. For 2026, the COLA amounted to a 2.8% increase.

The BLS released its July CPI data on Wednesday, showing consumer prices rose 3.4% compared with a year earlier, down from the 3.5% annual reading recorded in June.

Several organizations have now published estimates for the 2027 COLA based on the July figures along with projections for the remaining two months of relevant data. These estimates place the adjustment in a range between 3.2% and 3.6%.

The nonpartisan Committee for a Responsible Federal Budget (CRFB) released the lowest estimate, projecting that the COLA will ultimately settle at 3.2% when final data is published this fall. In its analysis, CRFB noted that CPI-W was flat in July and has risen 3.4% over the past year.

"High COLAs can provide helpful near-term support to seniors, but also impose significant costs for a Social Security retirement fund that is just six years from insolvency," CRFB stated. The organization added that automatic benefit cuts of 22% would take effect if the trust fund is depleted.

CRFB has proposed reforms to the COLA system intended to improve Social Security's solvency, including a COLA cap for high-income beneficiaries and a flat-rate COLA alternative. Senior advocacy groups, by contrast, have pushed in the opposite direction — arguing that CPI-W undercounts the inflation retirees actually face because it was designed around the spending patterns of working-age households. Organizations including TSCL have long called for replacing CPI-W with an experimental BLS measure known as CPI-E, which tracks the spending of Americans 62 and older and places greater weight on healthcare and housing.

AARP, the advocacy organization for individuals aged 50 and older, estimates the 2027 COLA at 3.5%. This marks the first time AARP has released a COLA estimate ahead of the third-quarter inflation reports.

"The sooner that we can give them reliable information as to how much their benefits might [increase next year], the sooner they can start planning," said Rich Johnson, AARP Vice President for Financial Security. "There's a lot of uncertainty about how food and, especially, energy prices will play out over the next two months. This is not set in stone."

The Senior Citizens League (TSCL) released the highest estimate, placing the 2027 COLA at 3.6%, which would represent an increase of 0.8 percentage points over the 2026 adjustment.

According to TSCL's analysis, if the estimated COLA were applied today, it would result in an average monthly benefit increase of $69.75, raising the average from $1,937.53 to $2,007.28.

TSCL Executive Director Shannon Benton said in a statement: "One of the wildcards in this year's forecast has been inflation's volatility. It started the year at 2.2%, then surged to 4.4% by May before falling back to 3.5% in June."

"That kind of instability can throw off forecasts, but our model is designed to avoid chasing every spike and dip, which has kept our predictions on a relatively steady course," Benton added.

The official 2027 COLA will be announced on October 14, 2026, following the BLS release of September CPI inflation data. The adjustment will take effect with payments to beneficiaries beginning in January 2027.