Forecasters Predict 2027 Social Security COLA at 1.8% Or 2.8%
Depending on the source, early forecasts for next year’s Social Security cost-of-living adjustment (COLA) have a much larger spread than usual.
While The Senior Citizens League this morning predicted the 2027 to be 2.8% after updated inflation and economic data was released this morning by the Department of Labor’s Bureau of Labor Statistics, retired independent Social Security and Medicare policy analyst Mary Johnson has her forecast much lower, at just 1.8%. The two monthly forecasts are not usually so far apart.
“New January consumer price data show inflation is slowing but that’s likely to clash with consumer experience. In fact, today’s latest consumer price data suggests the Social Security cost-of-living adjustment for next year could be just 1.2% based on the latest inflation data for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If the current inflation trends hold steady that would be the lowest COLA in a decade,” Johnson said today.
Meanwhile, TSCL adjusted its monthly COLA forecast from 2.5% in January to 2.8% today—which if it were to hold true through October would match the official 2026 COLA of 2.8%.
“The projected 2027 COLA will surely leave seniors dissatisfied and frustrated,” said TSCL Executive Director Shannon Benton. “The reality is most older Americans constantly tell us they believe the CPI-W, the measure used to calculate the COLA, underestimates inflation as they see it. Affordability is the popular word around town right now, even among other groups, because most Americans believe inflation is higher than the government claims.”
Figures released by the BLS today show CPI-W increased 2.2% over the last 12 months. For the month of January, the index increased 0.3% prior to seasonal adjustment. The CPI-W is based on the expenditures of households included in the Consumer Price Index for All Urban Consumers (CPI-U) definition that meet two requirements: more than one-half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months. The CPI-W population represents approximately 30% percent of the total U.S. population and is a subset of the CPI-U population.
Johnson said that for many consumers, government inflation data may seem to be at odds with the prices that they pay. “While lower prices would be welcomed by all, the details of today’s consumer price data suggests that some prices remain stubbornly elevated,” she said, pointing to energy prices such as electricity, natural gas and home heating oil which soared with recent bitterly cold winter weather. She also singled out certain other consumer products, such as the price of beef, auto maintenance and repairs, and healthcare services, which have not come down.
Seniors cut back on medical care to cope
If the 2027 COLA really comes in at 2.8%, this “paltry figure,” as TSCL referred to it in a press release this morning, would only exacerbate seniors’ financial stress. TSCL’s research shows that 57.6% of America’s 55.8 million seniors have forgone at least one healthcare product or service to cut costs in the last 12 months. The top medical services that seniors skip to trim their budgets are dental (42.3%), vision (28.8%), and hearing (19.6%).
“Medicare treats dental, vision, and hearing insurance like extras or add-ons for American seniors, but access to these services is essential,” Benton added. “Regular, preventive dental care can save you thousands of dollars in the long run, so, as a society, allowing cost to remain a barrier makes no sense. Vision and hearing loss also have meaningful connections to cognitive decline, meaning lack of access to this coverage progressively sabotages quality of life for countless seniors.”
The seniors who most depend on the COLA are more likely to forgo care. Only 18.9% of financially healthy seniors, who live comfortably with enough savings to provide adequate income for their whole retirement, had skipped a medical product or service. That figure rises to 78.7% among the financially at risk, whose incomes do not cover essentials.
A long way to official 2027 COLA
Johnson, who has been tracking the Social Security COLA for more than two decades, noted today that inflation is tricky to figure and reminds that much can change by October.
“My estimate tends to change with the monthly release of new inflation data,” Johnson said. “These monthly check-ins can give a glimpse of what the actual inflation data indicates for the third quarter, and that can be useful in making retirement financial decisions such as renewing a CD or budgeting.”
The official COLA is determined by inflation in the third quarter of the year—July, August, and September. Social Security adds the inflation for each month together, determines the average and compares that to the average from the fourth quarter a year ago. The percentage of change in the CPI-W is used to determine the COLA adjustment payable with the check received in January of the following year.
SEE ALSO:
• 2025 Inflation Rate Lowest Since 2020 as Average 2026 Social Security Checks Top $2K
• 2026 Medicare Part B Increase to Eat Up Much of Social Security COLA Raise
• 10 States that Rely Most and Least on Social Security
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.