Mary Johnson said the estimated Social Security COLA 2027 has fallen to 3.4% after July inflation data showed prices cooled. The projection still points to a larger monthly benefit increase for retirees, while the final figure is usually announced in October.
Johnson, an independent Social Security and Medicare analyst, said she calculates the rolling estimate from the latest monthly inflation data. She said the new estimate is below last month’s 3.7% forecast, but still above the historical average of 2.6%.
July inflation and CPI-W
The consumer price index rose 3.4% in July from a year earlier, down from 3.5% in June. The core rate rose 2.5% in July, compared with 2.6% in June. The CPI-W, which Social Security COLA uses, also rose 3.4% in July from a year earlier.
That leaves the 2027 estimate above the 2.8% COLA Social Security recipients began receiving in January and above the Social Security Trustees’ projection of 2.7%. A 3.4% increase would mean a bigger monthly payment increase than this year’s adjustment, if the estimate holds.
Mary Johnson and Medicare Open Enrollment
Johnson said, “It’s doubtful that anyone is celebrating because 3.4% is still higher than the average, which is around 2.6%.” She added, “We are in a brave new world of breathtakingly high prices and costs.”
She also warned, “Without the Part D pilot program’s increased subsidies to bring down premiums, this is likely to mean higher costs will be passed on to Medicare beneficiaries,” and said, “It will be more important than ever to watch for changes and to compare options during Medicare Open Enrollment October 15 – December 7.”
Committee for a Responsible Budget
The Committee for a Responsible Budget forecasts a 2027 COLA of 3.2%. It also says higher COLAs can add costs to a retirement fund that is expected to run dry by the end of 2032.
The Committee for a Responsible Budget said, “Without action, beneficiaries will face an abrupt 22% benefit cut when the retirement fund is exhausted and the program is forced to restrict costs to incoming revenues.” It added, “If a similar cut were imposed on retirees today, retirees would lose $500 per retiree per month, more than the average retired household spends on groceries each month.”
The 2027 figure can still move before October because it is a rolling projection tied to monthly inflation data. For retirees, that means the estimate now is useful for planning, but the number that governs next year’s benefit increase is still ahead.
