Social Security<\/a> averages the CPI-W for the current year, compares it to the previous year’s average, and then sets the COLA as the percentage increase, rounded to the nearest one-tenth of one percent.<\/p>\nFor example, the CPI-W average in 2025 was 317.265, which was 2.76% higher than the 2024 average of 308.729. That gave us a 2.8% COLA for 2026.<\/p>\n
The CPI-W average this year was 328.746, which is 3.62% higher than 2025’s average, and how we landed at the 3.6% COLA for 2027.<\/p>\n
How does the 3.6% COLA compare to past COLAs?<\/p>\n
The 3.6% COLA for next year is one of the highest in recent years. In 2022 and 2023, the COLAs were 5.9% and 8.7%, respectively. But before then, you’d have to go back to 2012, when it was also 3.6%. Here are the past 20 COLAs:<\/p>\n
2026: 2.8%
\n2025: 2.5%
\n2024: 3.2%
\n2023: 8.7%
\n2022: 5.9%
\n2021: 1.3%
\n2020: 1.6%
\n2019: 2.8%
\n2018: 2%
\n2017: 0.3%
\n2016: 0%
\n2015: 1.7%
\n2014: 1.5%
\n2013: 1.7%
\n2012: 3.6%
\n2011: 0%
\n2010: 0%
\n2009: 5.8%
\n2008: 2.3%
\n2007: 3.3%<\/p>\n
On the one hand, having a nice benefits boost to look forward to next year is a relief. However, that doesn’t help Social Security recipients with the inflation they’re facing right now. The 2027 COLA is high because inflation is high. Unfortunately, you don’t get one without the other.<\/p>\n
Annual COLAs, while appreciated, haven’t fully offset inflation over the years, and recipients have consistently lost purchasing power. Every $100 in benefits in 2016 would buy around $86.30 worth of items today. Needless to say, that isn’t ideal.<\/p>\n
There isn’t a quick solution, aside from Congress issuing a one-time adjustment, but I wouldn’t hold your breath, especially with the program already operating at a deficit. For now, recipients should budget accordingly, expecting the COLA might not stretch as far as they’d like.<\/p>\n","protected":false},"excerpt":{"rendered":"Of the nearly 55 million people who receive Social Security retirement benefits, many rely on it for most…\n","protected":false},"author":2,"featured_media":884315,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-884314","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/884314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=884314"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/884314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/884315"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=884314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=884314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=884314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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