Social Security COLA for 2027 could increase by 3.5%

Millions of Social Security beneficiaries could experience a larger-than-average cost-of-living adjustment in 2027, according to expert estimates.

The Social Security Administration is expected to announce the COLA for 2027 on Wednesday with the release of new government inflation data. Social Security experts estimate that the COLA could increase benefits by 3.5 to 3.6 percent next year, which would be the largest increase in three years.

Yet even with an above-average increase, recipients could still struggle to cover daily expenses.

More than three-quarters of adults 50 and older — 76% — said they don’t think a planned 3.5% Social Security cost-of-living adjustment for 2027 would be enough, according to an AARP survey released Monday. The survey of 1,023 adults aged 50 and over was conducted between September 17 and 21. The survey had a margin of error of 4.25%.

“I would love to see the cost of living increase be more generous,” said Donna Dalrymple, a 70-year-old retiree from Manchester, New Hampshire.

Dalrymple retired at age 65 following a cancer diagnosis, she said, prompting her to claim Social Security benefits and begin 401(k) withdrawals five years earlier than she had planned. Today, she worries that other rising costs, particularly those for Medicare, could outstrip the annual increase in Social Security benefits, she said.

Cost-of-living adjustments have averaged about 3.1% over the past decade, according to the Social Security Administration.

In September, estimates showed that Social Security’s COLA could be the highest in three years.

The Senior Citizens League, a nonpartisan senior advocacy group, and Mary Johnson, an independent Social Security and Medicare policy analyst, both project a 3.5% COLA for 2027. Meanwhile, the AARP projects a 3.6% increase in benefits.

The last time beneficiaries saw a larger increase was in 2023, when the COLA jumped to 8.7% — the highest in four decades — due to soaring inflation. In 2022, beneficiaries saw an increase of 5.9% as the inflation rate began to climb.

In 2026, Social Security beneficiaries received a 2.8% increase in their benefits.

A 3.5% Social Security cost-of-living adjustment for 2027 would increase the average benefit check by $67.90 per month. – at around $2,008 per month compared to $1,940 – according to the Seniors League.

A recent AARP survey found that 7 in 10 adults ages 50 and older believe an increase between 5% and 8% would be enough to help them meet the daily cost of living.

The official Social Security COLA announcement expected Wednesday may differ from September’s estimates because it will include an additional month of inflation data.

A “very sharp rise in inflation” could push Social Security’s COLA to 3.6%, Johnson said. But if inflation is lower than expected, the COLA could reach 3.4%, she said.

The Social Security cost-of-living adjustment is automatically applied to benefits to help keep pace with inflation.

Since 1975, COLAs have been calculated annually for Social Security and Supplemental Security Income, or SSI, benefits. However, in some years when there was little or no inflation, COLAs sucked.

“People are very, very grateful for it and they’re looking forward to it,” Social Security Administration Commissioner Frank Bisignano said Monday of the upcoming COLA announcement during an interview with CNBC’s Squawk on the Street.

Rising Medicare costs in 2027 could limit the size of the increase Social Security beneficiaries will see in their monthly checks.

Standard monthly premiums for Medicare Part B, which are generally automatically deducted from Social Security checks, are expected to be $209.50 in 2027, up from $202.90 in 2026. Medicare Part B covers certain medically necessary and preventive services. Some beneficiaries may pay additional surcharges, called income-related monthly adjustment amounts, if their income exceeds certain thresholds.

Meanwhile, Medicare Part D prescription drug plans could see modest premium increases in 2027, according to an analysis from KFF, a nonpartisan health policy research group. Part D premiums can also be deducted directly from Social Security checks.

The Trump administration recently announced it would send one-time $90 direct payments to more than 20 million Medicare Part B enrollees to help them pay monthly premiums.

Dalrymple, the New Hampshire retiree, said she doesn’t think she qualifies for the one-time payment, which excludes millions of Part B beneficiaries because of certain eligibility requirements. Dalrymple said she’s worried about rising Medicare costs for 2027.

“If the cost of Medicare absorbs the cost of living (adjustment), I’m really going to be hit with the affordability crisis because rents are going up, groceries are going up, gas is going up,” Dalrymple said.

Some Democrats, like Sen. Ron Wyden, D-Ore., the ranking member of the Senate Finance Committee, have questioned the Trump administration’s motives in sending the $90 payments only about a month before the midterm elections. President Donald Trump said separately that the government would send $5,000 to every adult U.S. citizen if Republicans retained control of the House and Senate.

Bisignano told CNBC on Monday that the one-time $90 payments are an example of how the Trump administration is “taking care of Americans” and working to keep vulnerable people, including the elderly, out of poverty.

Kathy Callaghan, 80, of Montpelier, Vermont, said she would have preferred the money to be put into the Medicare trust fund — which is expected to run out of money. to fund Part A in 2033 – rather than distributing it to Americans by check.

Callaghan said she plans to donate her $90 check to the Senate campaign of James Talarico, a Democrat and Texas state representative running for U.S. Senate.