Early Estimates Suggest Lower Social Security Cost-of-Living Adjustment for 2027
February 13, 2026 — Social Security beneficiaries may be facing a smaller increase in their benefits come 2027, according to early government inflation data and expert projections.
Background on Social Security COLA
The Social Security cost-of-living adjustment (COLA) is an annual increase designed to help benefits keep pace with inflation. It is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) comparing the third quarter of the current year with the same period in the previous year.
Beneficiaries experienced record-high COLAs in recent years: 5.9% in 2022 and a staggering 8.7% in 2023, a reflection of the sharp inflation at that time. However, as inflation has cooled, the size of the COLA has similarly decreased. For 2026, the COLA was set at 2.8%, which translated to an average increase of about $56 per month for retirees. It’s important to note that some beneficiaries saw this increase partially offset by higher Medicare premiums.
Early Inflation Data Signals Smaller Increase for 2027
New inflation data from January 2026 reveals that the CPI-W rose 2.2% over the prior 12 months, hinting that the COLA for 2027 could be on the lower end if inflation remains steady. Independent Social Security analyst Mary Johnson estimates the 2027 COLA might be as low as 1.2%, which would mark the smallest increase since 2017, when COLA was just 0.3%.
On the other hand, the nonpartisan Senior Citizens League projects a COLA of 2.8%, consistent with this year’s increase. Meanwhile, the Congressional Budget Office (CBO) forecasts a 3.1% COLA for 2027, followed by 2.5% the year after, as part of their long-term Social Security cost projections.
Impact on Seniors and Financial Concerns
The potential for a lower COLA has raised concerns among advocacy groups and seniors. The Senior Citizens League warns that a modest increase, such as 2.8%, would likely exacerbate the financial stresses faced by many seniors. Their recent polling indicated that nearly 58% of seniors have skipped purchasing at least one healthcare product or service in the past year to reduce expenses.
An AARP survey conducted in September 2025 further underscores the issue. Among approximately 1,000 adults aged 50 and older, 77% felt a 3% benefit increase would not adequately keep up with rising costs. A majority (72%) said they believed a more appropriate COLA would be 5% or higher to cover the true cost-of-living increases.
What Lies Ahead
It is important to note that these early estimates are subject to change. The official 2027 COLA will be determined by comparing the CPI-W data from the third quarter of 2026 to the third quarter of 2025, with the announcement typically made in October.
Social Security benefits adjustments affect about 75 million Americans, making the COLA an important factor in the financial planning of millions of retirees and disabled beneficiaries.
As inflation trends continue to unfold throughout the year, experts and beneficiaries alike will be watching inflation data closely, hoping for a COLA that sufficiently addresses the cost-of-living challenges faced by millions of Americans.
For ongoing updates on Social Security and personal finance news, stay tuned to CNBC.