Social Security benefits may rise 3.8% in 2027 as inflation cools
Forecasts point to a COLA near 3.8%, which could lift the average retiree check by about $74 a month starting in January.
By Sal Moretti · Money Reporter
2 min read
Social Security recipients could be in line for a bigger check in 2027, with one forecast putting next year’s cost-of-living adjustment at 3.8%. That would add about $74 a month to the average retiree benefit.
The Senior Citizens League, an advocacy group for older Americans, is projecting a 3.8% COLA, MarketWatch reported. The group’s estimate was unchanged from its prior monthly forecast.
Independent Social Security analyst Mary Johnson has a slightly lower estimate. Johnson now projects a 3.7% increase for 2027, down from her 4.7% forecast a month earlier, according to MarketWatch.
The potential bump would follow a 2.8% COLA this year. The Senior Citizens League said the average adjustment over the past 20 years has been 2.6%.
Inflation is driving the estimate
The cooler forecast comes after a softer inflation reading. The consumer-price index fell 0.4% last month, the first monthly drop since May 2020, as gasoline prices declined, MarketWatch reported.
That drop was twice as large as Wall Street had expected, according to MarketWatch. Still, Johnson cautioned that the path from here may be uneven because oil prices could be affected by renewed tension between the U.S. and Iran around the Strait of Hormuz.
Johnson told MarketWatch that it was unclear whether the recent inflation drop would last, and that shoppers waiting for lower prices might not feel much relief yet.
The Social Security COLA is designed to help benefits keep up with inflation. It is calculated using inflation data from the third quarter: July, August and September.
The official 2027 COLA is scheduled to be announced in October. Any increase would begin showing up in benefit payments in January.
Medicare costs could take a bite
A larger Social Security check may arrive alongside higher Medicare costs. Johnson said the Medicare Part B premium is expected to rise by about $6.60, or 3.3%, to $209.50 in 2027, based on the latest Medicare trustees’ report, MarketWatch reported.
Part B covers services including doctor visits, lab tests and preventive care. Medicare Part D covers prescription drugs.
Johnson said a 3.3% Part B increase would be below the average annual rise of 5.4% over the past decade. She also warned that some beneficiaries could face steeper costs elsewhere, including a Part D deductible increasing to as much as $700 in 2027.
For retirees, the final number will come down to the inflation readings still ahead. For now, the early math points to a 2027 benefit increase above both this year’s COLA and the 20-year average cited by The Senior Citizens League.
This story draws on original reporting from MarketWatch.