The 2027 Social Security cost-of-living adjustment is the highest in four years but it’s unlikely to be enough for struggling seniors, experts say.
The adjustment, also known as COLA, is 3.6 percent, the Social Security Administration announced last week, and will kick in January 1, 2027. It will raise the average monthly payment from $1,988.45 to $2,062.02, according to data.
But that’s too small of an increase and too late, according to advocacy group The Senior Citizens League.
“Seniors won’t see any changes to their benefit checks due to the COLA until January 1st, but the inflation the COLA is supposed to account for already occurred,” the league said October 14 statement.
“In years like 2026, when lots of inflation happens in the first half of the year, it means seniors have to endure elevated prices for months without any financial recourse.”
Inflation rose as much as 4.2 percent in 2026, far outpacing the 2.8 percent COLA increase put in place to start 2026.
That same problem could plague retirees in 2027 if one of the main drivers of inflation in 2026, the Iran war, continues into the new year, the league said.
“When inflation spikes due to a geopolitical event like the Iran war, seniors pay the price,” the league’s executive director Shannon Benton said.
“Prices go up today, but benefits stay the same for months due to an outdated COLA methodology.”
The Social Security Administration uses inflation data for urban wage earners and clerical workers, called CPI-W, to determine how much the COLA increase will be.
That data falls short because it doesn’t factor in people who don’t work, such as retirees, and only represents a third of the U.S. population, nonprofit think tank Cato Institute said in a report last Wednesday.
The chained consumer price index for all urban consumers would be a better data set for COLA, the institute said.
“Unlike the CPI‑W, chained CPI covers 93 percent of the US population” the report said.
“It generally rises more slowly than CPI‑W and provides a more accurate measure of changes in the cost of living for the average consumer.”
However, over the past 24 years, the chained CPI would have produced lower COLAs than the CPI-W, senior advocacy group AARP argued in an October analysis.
“Switching from the CPI-W to the Chained CPI is not a harmless technical adjustment; it is a deliberate policy choice that would permanently erode the financial security of America’s retirees,” AARP said.
