Social security recipients could soon be seeing an increase in benefits amid the rising costs of living.
Seniors and others who receive Social Security benefits could receive a 2027 cost-of-living adjustment (COLA) of 3.9%, according to a new estimate from the Senior Citizens League, an advocacy group for older American citizens.
“This is up quite a bit from earlier in the year, when our projection generally sat between 2% and 3%,” Alex Moore, the statistician for the Senior Citizens League, told CBS News.
The nearly 4% increase is up from this year’s 2.8%. As of January, the estimated average monthly Social Security retirement benefit is $2,071, according to the agency. An increase of 3.9% would add $80.77 to that monthly check, bringing it up to about $2,152.
COLA is used to help Social Security benefits keep up with the pace of inflation, which has been climbing at its fastest pace in almost three years.
However, because the 2027 adjustment is based on inflation from July through September, seniors could potentially fall back if prices see a sharp increase either before or after that period of time.
American seniors have told the Senior Citizens League that they’ve been struggling financially after the recent spike in fuel costs amid the war in Iran, Moore said.
Even though seniors received a 2.8% COLA in 2026, the Consumer Price Index rose at an annual rate of 3.3% in March and 3.8% in April, meaning surging consumer prices are exceeding Social Security benefits.
“As we go throughout the year, rising oil prices have the potential to worsen the situation,” Moore said. “Higher energy prices make it more expensive to farm crops, transport goods and services, and even operate the machinery to produce goods in factories.”
“So the inflation we’re seeing from rising oil prices right now is likely just the tip of the iceberg, with downstream effects on inflation across the whole economy — and thereby seniors — yet to come.”
Those who receive Social Security benefits could receive a 2027 cost-of-living adjustment of nearly 4%. zinkevych – stock.adobe.com A recent calculation from the Senior Citizens League showed that even with cost-of-living adjustments, seniors are falling behind financially, and Social Security benefits have lost almost 14% of their value over the last decade.
Value has decreased because the inflation index that’s used to set the annual COLA doesn’t accurately reflect all the costs that seniors have, such as healthcare expenses.
The estimate from the Senior Citizens League is roughly the same as this week’s projection from the Committee for a Responsible Federal Budget (CRFB), which predicted a 2027 COLA of 3.8%.
Though the nonpartisan group noted that it could range anywhere from 3% to 4.5%, depending on how inflation changes over the next few months.
The Social Security COLA for 2027 won’t be officially set until October.
An increase of 3.9% would add $80.77 to the monthly check, bringing it up to about $2,152. larryhw – stock.adobe.com While a higher COLA could ease expenses for seniors, it may also worsen the financial strains that the Social Security Administration has been dealing with, such as funding deficits for its trust funds, the CRFB noted.
“We estimate it would worsen Social Security’s shortfall by roughly $300 billion over the next decade and advance the insolvency of the old-age trust fund by three months from late 2032 to earlier in the year,” the CRFB said.
