A man walks by the dairy section at a supermarket in Houston, Texas, on March 17, 2026.
Ronaldo Schemidt | AFP | Getty Images
New government data showing rising inflation points to a higher Social Security cost-of-living adjustment for 2027, according to new forecasts.
The Social Security COLA may be 4.2% amid “sharply rising” gasoline, energy and fresh produce prices, according to Mary Johnson, an independent Social Security and Medicare policy analyst.
Johnson’s new forecast is based on April consumer price index data that was released on Tuesday, and is up from the 3.2% COLA estimate for 2027 that Johnson forecast last month.
Meanwhile, the Senior Citizens League, a nonpartisan senior group, now estimates the COLA could be 3.9% in 2027 — up from the 2.8% annual increase the organization had forecast in April.
The higher COLA forecasts come as consumers continue to face price pressures. Categories including home heating oil, tomatoes, gasoline, coffee and fresh vegetables have seen their prices jump in the past 12 months, according to Johnson.
Social Security benefits have lost 13.7% of their buying power since 2016, the Senior Citizens League estimates, and would require a 15.7% increase — or $295.85 per month for the average beneficiary — to catch up.
In contrast, the Senior Citizens League’s current 3.9% COLA forecast would increase average benefit checks for retirees by an estimated $81.17 per month.
Inflation higher than expected in April
The new data shows the broad consumer price index rose 3.8% over the past 12 months, the highest increase since May 2023, amid a faster-than-expected increase in prices for certain goods and services.
Meanwhile, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which is used to calculate the Social Security COLA, was up 3.9% over the past 12 months, the April data shows.
Social Security benefits increased by 2.8% in 2026 for approximately 75 million beneficiaries. The annual COLA has averaged 3.1% over the past decade, according to the Social Security Administration.
To be sure, the current Social Security COLA forecasts for 2027 are subject to change.
The Social Security Administration calculates the COLA every year by comparing third-quarter CPI-W data to the third-quarter data of the previous year. The increase from one year to the next, if there is one, determines the COLA. The change for the next year is typically announced by the agency in October.
There are still five more months of inflation data to come in before the official calculation of the Social Security COLA for 2027, according to Johnson.
