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A major social security announcement is expected this week and it will have big implications on what recipients can expect for 2027.
The Social Security Administration is expected to announce its cost-of-living, or COLA, increases for 2027 on Wednesday. The announcement will decide how Social Security payments are adjusted each year to account for cost of living changes and inflation.
Here’s what to know.
When is the Social Security COLA announcement?
The official announcement is slated for Oct. 14, the agency said.
Notices last year became available online to most beneficiaries in the Message Center of their my Social Security account.
“The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation,” the administration’s website states.
How is the COLA calculated?
According to the agency, the COLA update “is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.”
The CPI-W “is determined by the Bureau of Labor Statistics in the Department of Labor.”
How much of an increase is expected for 2027? Latest predictions and how much they could mean for checks
Oftentimes, predictions will be made about where the COLA will be come December.
The Senior Citizens League announced last month that it predicted the adjustment will sit at 3.5%, which if it took effect now would equate to $67.90 more in payments.
“The current average beneficiary receives $1,940.08 in their monthly Social Security check. With a 3.5 percent COLA, that would rise to $ 2,007.98,” TSCL reported.
Meanwhile, Mary Johnson, an independent Social Security and Medicare analyst, told USA Today in August her predictions sat at 3.4%.
Those numbers are both down from predictions earlier this summer, which peaked at 3.8%.
“The biggest thing we’re watching with the COLA announcement coming are short-term shocks to the economy that push inflation way up or down in the next 30 days. Of the three CPI-W figures used to calculate the COLA, two are already in,” TSCL Executive Director Shannon Benton said in a release.
What about inflation?
The U.S. reported last month that inflation accelerated in August as gas prices spiked in the wake of renewed fighting in the Middle East. More of the same is expected for September with all sides in the Iranian conflict unwilling to concede ground.
The Labor Department is expected to report Wednesday that its consumer price index rose by two-tenths of a percent month over month and rose 3.6% compared with a year ago at this time.
A day later, the department will release its producer price index — which captures inflation before it reaches consumers. Same story there.
Economists expect an increase from the 5.4% registered in August, which was up from 4.8% in July. Last week, PepsiCo said it was raising prices on Doritos and other favorites, citing rising costs for fuel, aluminum and commodities.
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