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Retirees may receive a larger Social Security cost-of-living adjustment in 2027, although the additional money may not stretch as far as the percentage suggests.

The Senior Citizens League’s final forecast calls for a 3.5% COLA. The estimate is one-tenth of a percentage point lower than the organization’s August prediction, but seven-tenths of a point above the 2.8% increase beneficiaries received in 2026.

At 3.5%, a retiree receiving $1,500 a month would get an additional $52.50 before deductions. A $2,000 benefit would increase by $70, and a $2,500 benefit would rise by $87.50. For a full year, those increases would amount to $630, $840, and $1,050, respectively.

The estimate is not yet official. The Social Security Administration will announce the 2027 adjustment on October 14, after the Bureau of Labor Statistics reports September inflation.

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How the COLA is determined

Social Security does not base the adjustment on inflation for the entire calendar year. Instead, the calculation compares the average CPI-W during July, August, and September with the average from the same three months a year earlier.

The CPI-W measures price changes affecting urban wage earners and clerical workers. It rose 3.4% from a year earlier in July and 3.5% in August, leaving September as the final piece of the calculation.

A sharp rise or fall in prices during September could move the official COLA slightly above or below the current forecast.

AARP has offered a similar but slightly higher projection of 3.6%. Together, the estimates suggest that the final adjustment will probably be higher than the 2.8% increase for 2026.

Automatic Social Security COLAs are intended to keep benefits from losing purchasing power to inflation. The program’s official calculation rounds the increase to the nearest tenth of a percentage point.

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Why retirees may not feel fully compensated

The adjustment does not reimburse retirees for higher expenses incurred during the year. Prices rise before the COLA takes effect, meaning beneficiaries must absorb those costs until their payments increase in January.

The CPI-W also reflects the spending patterns of workers rather than retirees. Older households often devote more of their income to housing, medical care, prescription drugs, and insurance, expenses that can increase at different rates from the broader index.

In a 2026 survey by The Senior Citizens League, 89% of older respondents said the year’s 2.8% COLA was too low. Forty-four percent said they depended entirely on Social Security for their income. The group’s new 3.5% forecast would be the largest adjustment since 2023.

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Don’t budget the entire increase yet

Medicare Part B premiums are generally deducted directly from Social Security payments. If the standard premium rises in 2027, retirees enrolled in Part B will keep less than the gross COLA calculation suggests.

Beneficiaries should therefore treat the projected increase as a planning estimate, not as the expected change in their bank deposit.

Once the official COLA and Medicare premiums are announced, retirees can compare their new net benefit with anticipated increases in housing, utilities, food, insurance, and medical costs. Personalized Social Security notices later in the year will show the actual benefit amount and applicable deductions.