By law, the annual Social Security COLA is calculated using the Bureau of Labor Statistics’ consumer price index (CPI) inflation<\/a> data for the months of July, August and September based on a variant of the dataset known as CPI-W. The COLA boosts beneficiaries’ payments to account for a rise in the cost of living, and the COLA for 2026 amounted to a 2.8% increase.<\/p>\n The BLS released the July CPI inflation data Wednesday that showed consumer prices were up 3.4% from a year ago. That’s down from a 3.5% annual reading in June.<\/p>\n Several groups have released estimates for the 2027 COLA based on the July data and estimates for the next two months of data, which have the COLA landing in a range from 3.2% to 3.6%.<\/p>\n INFLATION COOLED IN JULY BUT REMAINED ELEVATED AS FED WEIGHS RATE HIKES<\/a><\/p>\n The nonpartisan Committee for a Responsible Federal Budget released the lowest of those estimates, projecting the COLA will ultimately be at 3.2% when the final data is released this fall. It noted in its analysis that CPI-W was flat in July and is up 3.4% over the last year.<\/p>\n “High COLAs can provide helpful near-term support to seniors, but also impose significant costs for a Social Security<\/a> retirement fund that is just six years from insolvency,” CRFB said, adding that automatic benefit cuts of 22% would occur if the fund is depleted.<\/p>\n CRFB has proposed reforms to COLAs aimed at helping to shore up Social Security’s solvency<\/a>, including a COLA cap for high-income beneficiaries as well as a flat rate COLA.<\/p>\n ONE TYPE OF SOCIAL SECURITY ADJUSTMENT COULD CUT THE 75-YEAR SHORTFALL IN HALF<\/a><\/p>\n Social Security’s 2027 COLA is estimated at between 3.2% and 3.6%, with about two months left until the official COLA is finalized. (Getty Images\/stock)<\/p>\n The AARP, which advocates for policies it views as beneficial to people over the age of 50, estimates that the 2027 COLA<\/a> will be 3.5% in its first-ever COLA estimate to be released before the third-quarter inflation reports come out.<\/p>\n “The sooner that we can give them reliable information as to how much their benefits might [increase next year], the sooner they can start planning,” AARP VP for Financial Security Rich Johnson said.<\/p>\n “There’s a lot of uncertainty about how food and, especially, energy prices will play out over the next two months. This is not set in stone.”<\/p>\n NEW PROPOSAL WOULD CAP SOCIAL SECURITY BENEFITS AT $100K FOR WEALTHY COUPLES<\/a><\/p>\n A woman walks into a Social Security office in Houston, Texas, July 13, 2022. (Mark Felix\/The Washington Post \/ Getty Images)<\/p>\n The Senior Citizens League (TSCL) released an estimate that puts the 2027 COLA at 3.6%, which would represent an increase of 0.8 percentage points when compared with the 2026 COLA.\u00a0<\/p>\n The TSCL analysis noted that if the estimated COLA were to take effect today, it would amount to an increase of $69.75 in average benefits, rising to $2,007.28 from $1,937.53.<\/p>\n TSCL executive director Shannon Benton said in a statement that, “One of the wildcards in this year’s forecast has been inflation’s volatility. It started the year at 2.2%, then surged to 4.4% by May before falling back to 3.5% in June.”<\/p>\n “That kind of instability can throw off forecasts, but our model is designed to avoid chasing every spike and dip, which has kept our predictions on a relatively steady course,” Benton added.<\/p>\n![\"Man](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/08\/social-security-card-and-cash.jpg\")
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