Based on the latest CPI data, released this morning, TSCL predicts that Social Security’s 2027 Cost of Living Adjustment (COLA) will be 3.9%, or 1.1 percentage points higher than this year’s COLA of 2.8%. The average benefits check for retired workers would increase by $81.17, from $2,081.16 to $2,162.33.
With inflation rising back toward the highs of the early 2020s, many seniors say the cost of essentials continues to outpace their monthly budgets. For example, a retiree receiving $2,000 monthly Social Security benefit would see an increase of about $80 per month with a 3.9 percent COLA. However, the supermajority of retirees agree that rising costs for things like Medicare premiums, housing costs, utilities, and grocery prices consume that gain and then some.
Seniors have already started cutting back on essential healthcare services to make ends meet. According to a previous TSCL survey, more than 57 percent have skipped one or more medical products or services in the last year due to cost.
Key Insights:
- TSCL’s current model already projects a higher COLA in 2027 than the 2.8 percent issued in 2026. However, fast-rising oil prices could have downstream effects on the economy and push inflation even higher. The Louis Federal Reserve has found that higher oil prices “have historically coincided with both food prices and broader consumer inflation.” In other words, when gas prices goes up, other things tend to follow, which will put even more pressure on seniors already struggling to get by.
- Healthcare remains one of the biggest financial pressures facing seniors. Even modest increases in Medicare premiums, prescription drug costs, or insurance expenses can significantly reduce the real value of annual COLA increases. Housing affordability also remains a growing concern, particularly for retirees living in high-cost metropolitan areas. TSCL continues to advocate for policies that protect seniors’ purchasing power while improving the accuracy of the COLA formula to better reflect the spending patterns of older Americans.
TSCL Executive Director Shannon Benton says…
- “Many seniors are telling us the same thing: As inflation picks back up, life still does not feel affordable. The average senior already lives on much less than younger Americans, according to the Census Bureau, and our supporters constantly tell us they feel like they’re falling farther and farther behind.”
- “For retirees living on fixed incomes, the costs that matter most, especially healthcare, housing, utilities, and insurance, continue to rise faster than prices in the rest of the economy, silently wrenching seniors dry. This makes the national affordability conversation even more important than ever.”
- “People earn their Social Security benefits through a lifetime of work, but some policymakers have proposed cutting benefits by moving to a Chained Consumer Price Index, which assumes people will accept a lower cost of living when prices rise. Policymakers should focus on strengthening the program in ways that protect retirees’ financial security, not trying to mask benefit cuts as something else.”
About TSCL:
The Senior Citizens League (TSCL) is one of the nation’s largest nonpartisan seniors’ groups. Established in 1992 as a special project of The Retired Enlisted Association, our mission is to promote and assist our members and supporters, educate and alert senior citizens about their rights and freedoms as U.S. citizens, and protect and defend the benefits seniors have earned and paid for. TSCL consists of vocally active senior citizens concerned about the protection of their Social Security, Medicare, and veteran or military retiree benefits. To learn more, visit https://seniorsleague.org/about-us/.
About the TSCL COLA Model:
TSCL issues a new prediction of the next COLA for Social Security each month using our statistical model. The model incorporates the Consumer Price Index, the Federal Reserve interest rate, and the national unemployment rate to make its predictions. The model’s predictions update throughout the year, adjusting in response to economic conditions. For additional information about the model, contact Alex Moore, TSCL’s statistician, at amoore@tsclhq.org.
We released a new version of the model, v1.2, in January 2025. The new version updates the model’s date handling, processing data according to the federal fiscal year rather than the calendar year. The new model also reduces each prediction’s reliance on previous predictions made throughout the federal fiscal year.