The 2027 Social Security COLA Is Still an Estimate Until Oct. 14

Social Security recipients do not have an official 2027 cost-of-living adjustment yet. AARP’s latest published estimate is 3.5%, and the final number is scheduled to be announced Oct. 14 after the government releases September inflation data.

At 3.5%, AARP estimates the average retired worker’s benefit would rise by about $73 a month. That is a useful planning number, but it is still a projection rather than a confirmed increase.

How the COLA Is Calculated

The Social Security COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The calculation compares the average index level for July, August and September with the same three-month period from the prior year.

That means the annual adjustment cannot be finalized until the September CPI-W figure is available. The Bureau of Labor Statistics is scheduled to release that data in October, allowing the Social Security Administration to announce the official COLA.

AARP’s 3.5% estimate was based on the inflation information available when its forecast was updated. Because another inflation reading can change the calculation, the 3.5% projection should be treated as provisional until the official COLA is announced.

What a 3.5% Increase Would Mean

AARP reported that the average retired worker was receiving about $2,086 a month. A 3.5% adjustment would add roughly $73 to that amount before other deductions.

People with different benefit amounts would see different dollar increases because the COLA is a percentage. A person receiving a smaller monthly benefit would receive a smaller dollar increase, while a person receiving more would receive a larger one.

The Deposit Can Change for Another Reason

The gross Social Security COLA is not always the same as the increase a beneficiary sees in a bank deposit. Many beneficiaries have Medicare Part B premiums deducted directly from their Social Security payments.

The 2027 Part B premium is set separately. Until that number is available, beneficiaries can estimate the gross Social Security increase but not necessarily the exact change in their net monthly payment.

What to Watch Next

The official 2027 COLA is scheduled for Oct. 14. Until then, 3.5% should be described as AARP’s estimate, not as a promised or approved increase.

References: AARP