The Social Security cost-of-living adjustment for 2027 is likely to be a big one if sharply rising gas prices continue.
Based on the Consumer Price Index data released Tuesday, the Senior Citizens League predicts COLA will be 3.9%, 1.1 percentage points higher than this year's COLA of 2.8%. Mary Johnson, an independent Social Security and Medicare policy analyst, predicts a 4.2% increase for 2027.
In April, the Consumer Price Index for All Urban Consumers increased 0.6% on a seasonally adjusted basis, after rising 0.9% in March, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all items index increased 3.8% before seasonal adjustment.
With this percentage jump, the average benefits check for retired workers would increase by $81.17, from $2,081.16 to $2,162.33, according to Shannon Benton, the League's executive director.
Sharply rising prices, for gas, energy and fresh produce drive Johnson's forecast. "This represents the highest rate of inflation since 2022, and a potentially significant erosion in many consumers' standard of living," she said.
Johnson based her 4.2% percentage increase on the average rate of inflation over the past year, which changes with each month's new inflation numbers.
Both forecasts are "certainly within range," Johnson told ThinkAdvisor Tuesday in an email. "It might get worse though if the war isn't resolved soon."
Before the start of the war with Iran, Johnson estimated that the COLA for 2027 would be just 1.2% based on January 2026 data.
With inflation rising back toward the highs of the early 2020s, many seniors say the cost of essentials continues to outpace their monthly budgets, according to the Senior Citizens League.
"For example, a retiree receiving a $2,000 monthly Social Security benefit would see an increase of about $80 per month under a 3.9% COLA," according to Benton. "However, a supermajority of retirees agree that rising costs for things like Medicare premiums, housing, utilities, and groceries consume that gain and then some."
According to a previous TSCL survey, more than 57% of seniors have skipped one or more medical products or services in the last year due to cost.
With five more months of data to come, Johnson says her estimate is likely to change. The annual COLA is based on inflation data for the third quarter, through September.
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