Social Security’s 2027 cost-of-living adjustment is close to settled before the official number arrives. Two of the three inflation months that set the raise are already published, and the main forecasters cluster at 3.5% to 3.6%. That would be the biggest bump since the 8.7% increase for 2023, and a clear step up from 2.5% for 2025 and 2.8% for 2026.
For a 50-plus household, the useful question is not the headline percentage alone. It is how much of the raise survives Medicare premiums, what is driving the inflation behind it, and how the longer trust-fund clock fits into retirement planning.
- Bureau of Labor Statistics (August 2026 CPI): the CPI-W, the index Social Security uses, rose 3.5% over 12 months after 3.4% in July; energy prices were up 16.3% over the year while core inflation ran 2.4%.
- The Senior Citizens League’s final estimate puts the 2027 COLA at 3.5%, lifting its average benefit figure from $1,940.08 to $2,007.98 a month; AARP projects 3.6%, or about $75 more for the average retired worker.
- 2026 Medicare Trustees Report: the standard Part B premium is projected to rise about 3.3%, from $202.90 to roughly $209.50 a month in 2027, after a 9.7% jump for 2026.
Two of three months are already locked in
The formula is fixed in law. Social Security averages the CPI-W for July, August and September, compares that with the same three-month average from the prior year, and rounds the change to the nearest tenth of a percent. The Bureau of Labor Statistics reported July CPI-W inflation at 3.4% and August at 3.5%, with the August index level at 328.481. Only September remains. The Bureau of Labor Statistics is scheduled to publish it on Wednesday, Oct. 14, and the Social Security Administration announces the COLA from that report.
That is why the estimates have narrowed instead of swinging. The Senior Citizens League trimmed its call from 3.6% in August to 3.5% in September and labeled it final. Independent Social Security and Medicare policy analyst Mary Johnson also sits at 3.5%. AARP, publishing a COLA forecast for the first time, uses 3.6%, built on CPI-W data through August plus Cleveland Fed inflation projections for September. AARP’s Rich Johnson said he expects a raise “in the mid-3 percent range” unless prices change dramatically in September.
The mix behind that inflation matters. In the August report, energy prices were up 16.3% over 12 months and gasoline 27.4%. Prices excluding food and energy rose a far calmer 2.4%, shelter 3.0%, and food 2.7%. Energy is the volatile piece, which is why forecasters keep flagging oil as the main wild card for the last month. Analysts quoted by AARP tie the run-up to tariffs and the energy shock from the conflict involving Iran.
What a mid-3% raise looks like in dollars
Social Security’s own history page shows how unusual the past few years have been. From 2001 through 2025 the COLA averaged roughly 2.6%, according to AARP, with no increase at all for 2010, 2011 and 2016. Then came 5.9% for 2022, 8.7% for 2023, 3.2% for 2024, 2.5% for 2025 and 2.8% for 2026. The 2026 raise reached nearly 71 million Social Security beneficiaries and about 7.5 million SSI recipients.
The Senior Citizens League puts the current average beneficiary check at $1,940.08; a 3.5% COLA adds $67.90. AARP’s figure for the average retired worker is about $2,086 a month. On that base, a 3.5% raise works out to roughly $73 a month, and AARP’s 3.6% to about $75.
The number matters because many retirees lean on it heavily. In the Senior Citizens League’s 2026 survey, 44% of older Americans said they draw all their income from Social Security, and 89% thought the 2026 COLA was too low.
Medicare takes back a smaller slice this time
For most retirees on Original Medicare, the Part B premium comes straight out of the Social Security check. Last year that offset was heavy: the standard premium climbed from $185 to $202.90, about 9.7%, against a 2.8% COLA. For 2027, the Medicare Trustees project a much smaller increase of about 3.3%, to roughly $209.50, according to KFF’s review of the 2026 Trustees Report.
If both estimates hold, the average retired worker’s roughly $73 raise would shrink by about $6.60 for the higher premium, leaving something near $66 a month. That is a projection, not a bill. The Centers for Medicare & Medicaid Services typically sets the final premium around November. Higher earners pay income-related surcharges on top of the standard premium; for 2026 those start above $109,000 of modified adjusted gross income for single filers and $218,000 for joint filers.
The longer clock behind the annual raise
The yearly COLA sits on top of a slower-moving funding story. The 2026 Social Security Trustees Report projects the retirement trust fund, known as OASI, to run out of reserves in the fourth quarter of 2032, one quarter earlier than last year’s estimate. At that point, incoming payroll taxes would cover about 78% of scheduled benefits. On a combined basis with the disability fund, depletion is projected in the third quarter of 2034, with about 83% of benefits payable. The long-range shortfall widened to 4.42% of taxable payroll from 3.82%.
The Medicare hospital insurance fund is projected to be depleted in the second quarter of 2033. None of those dates means checks stop. They mark the point by which Congress would need to act to keep paying full scheduled benefits, and lawmakers have historically stepped in before deadlines. For planning, though, they are a reason to treat Social Security as a foundation rather than the whole house.
What to watch
Watch three markers over the next few months. First, the September CPI-W report on Oct. 14 and the COLA announcement that follows; a large energy move in September is the main thing that could push the final number outside the 3.5% to 3.6% range. Second, the official 2027 Part B premium from CMS around November, which decides how much of the raise reaches your bank account. Third, whether inflation outside energy stays near the 2.4% core pace. If energy cools while core stays calm, the 2028 COLA could land closer to the long-run average of about 2.6%.
A mid-3% raise is real help after a year when energy costs ran hot, but it is a catch-up, not a windfall. Retirees who budget on the net figure after Medicare, rather than the headline percentage, will have the clearer picture for 2027. This article is general information, not personalized financial advice.
