Social Security 2027 COLA projected at 3.5%, sixth straight above-average raise

Social Security's 2027 cost-of-living adjustment is tracking toward 3.4-3.6%, which would mark the sixth consecutive above-average raise for more than 71 million beneficiaries.

Social Security's 2027 COLA is tracking toward 3.4-3.6%, a sixth consecutive above-average raise for 71 million beneficiaries, as tariff and oil price pressures keep inflation elevated.

The Senior Citizens League, a nonpartisan senior advocacy group, updated its 2027 COLA projection to 3.6% following the July inflation report, while independent policy analyst Mary Johnson revised her estimate to 3.4%.

At the average of 3.5%, beneficiaries would receive a tie for the seventh-largest percentage increase since 1992. The 2027 adjustment would follow COLAs of 5.9% (2022), 8.7% (2023), 3.2% (2024), 2.5% (2025), and 2.8% (2026). The 8.7% raise in 2023 was the highest since 1982. The last time benefits grew by at least 2.5% for six straight years was 1988-1997.

The projected COLA would outpace the 3.25% Medicare Part B premium increase projected in the 2026 Medicare Trustees Report — the first time since 2023 that the benefit raise exceeds premium growth, meaning traditional Medicare enrollees retain more of next year's increase.

Tariffs and Oil Prices Drive the Projection

Two of President Trump's policies are directly influencing consumer prices and, by extension, the COLA calculation. The administration reimposed sweeping global tariffs on more than 80 countries using Section 301 of the Trade Act of 1974, after the Supreme Court invalidated the earlier "Liberation Day" tariffs in February 2026. Assigning duties to imported goods raises domestic production costs and consumer prices, just as it did in 2025.

The Trump-led Iran war is the other major policy affecting prices. After the president approved military action against Iran on Feb. 28, Tehran shut down the Strait of Hormuz to most commercial vessels, disrupting the flow of a fifth of the world's crude oil supply and sending fuel prices sharply higher.

The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Energy prices can account for 7-8 percent of the overall CPI-W basket, and higher fuel costs ripple through transportation and logistics costs across the economy. Oil prices whipsawed through the first half of 2026 — spiking after the Iran conflict began, then falling in May and June on ceasefire hopes — and have rebounded in recent weeks, which could push COLA estimates higher before the final calculation.

Part B Premium Growth Slows, Boosting Net Benefit

Close to half of all retired-worker beneficiaries are enrolled in traditional Medicare, which includes Part B (outpatient services) with a standard monthly premium of $202.90 in 2026. This premium is typically deducted from monthly Social Security payouts.

Throughout much of the 21st century, Part B premiums have risen faster than Social Security COLAs. Over the last three years, the Part B standard premium increased by 5.9 percent (2024), 5.9 percent (2025), and 9.7 percent (2026), partially or fully offsetting benefit increases for tens of millions of retirees.

The 2026 Medicare Trustees Report projects Part B premiums to rise 3.25 percent next year. If accurate, this would mark the first time since 2023 that the COLA increases at a faster pace than the Part B premium, allowing traditional Medicare enrollees to retain more of their benefit raise.

The actual 2027 COLA will be announced Oct. 14, after the Bureau of Labor Statistics releases its September inflation report. If the adjustment reaches 3.8 percent, the average retiree receiving $2,092 per month would see roughly $79.50 more per month, or about $954 per year. Retirees should note that healthcare costs in retirement typically rise faster than overall inflation, and the actual net benefit increase depends on individual circumstances, including Medicare Part B premium changes and other deductions.

This article is for informational purposes only and does not constitute investment, tax, or legal advice; readers should verify all figures against the latest official announcements from the Social Security Administration and the Centers for Medicare & Medicaid Services.