Key Points
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Inflation could be higher in September due to rising fuel costs.
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These inflationary pressures could also push the 2027 COLA higher.
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However, a bigger COLA isn’t the windfall that it might seem to be.
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As things stand, Social Security benefits will increase by around 3.5% in 2027. The Senior Citizens League (TSCL), a nonpartisan organization that advocates for seniors’ issues, projects this will be the amount of next year’s Social Security cost-of-living adjustment (COLA). So does independent Medicare and Social Security analyst Mary Johnson. AARP’s COLA prediction is only slightly higher at 3.6%.
President Donald Trump doesn’t set the COLA. However, his policies are shaping the extent of the increase. The “Trump bump” for your 2027 Social Security COLA could be bigger than expected — and there’s both good news and bad news.
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Why next year’s COLA could be bigger than expected
The Social Security Administration (SSA) calculates the annual COLA using an inflation metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). In particular, the agency uses CPI-W values for the third quarters of the current and prior years.
Those 2027 COLA estimates of 3.5% and 3.6% are based on the CPI-W figures that are already available. However, if inflation rises in September, the CPI-W for the final month of the third quarter will raise the COLA above previously projected levels.
Is it likely that this will happen? Yes. Fuel prices have risen in recent weeks as the war that President Trump initiated with Iran drags on. Diesel prices hit a record high. Importantly, fuel prices, especially for diesel, drive transportation costs for other products.
Another factor at play is the White House’s trade policy. On Aug. 19, 2026, the president imposed 50% tariffs on many imports from Canada. These came on top of a sweeping array of other tariffs the administration has levied.
An analysis conducted by The Peterson Institute for International Economics, a nonpartisan research organization, found that roughly 90% of tariffs are paid for by U.S. consumers and businesses. When consumers and businesses pay more for products, it leads to higher inflation, even if only temporarily.
The good news and the bad news
The good news for retirees and other Social Security beneficiaries is that the 2027 COLA, whatever the final amount, will help offset rising costs. The purpose of the COLA is to help prevent Social Security benefits from being eroded by inflation.
However, there’s also bad news. Unfortunately, a bigger COLA isn’t the windfall that it might seem to be. Why? There are two structural problems with the annual adjustment.
First, Social Security COLAs always lag inflation. In other words, Social Security beneficiaries must absorb the full price shocks well before they receive any benefit increase. For example, millions of retirees are paying higher prices for fuel and other products now, but they won’t see any extra money in their Social Security checks until January 2027.
Second, the CPI-W used to calculate the annual COLA doesn’t fully reflect the higher prices seniors pay. In particular, the costs of healthcare in retirement aren’t adequately represented in the formula.
This won’t be a surprise to most retirees who receive Social Security benefits. TSCL’s 2026 Senior Survey found that 89% of older Americans viewed their 2026 COLA as too low to keep up with inflation. Unfortunately, their opinions are unlikely to change with the 2027 COLA.
Counting down the days
What will the 2027 Social Security COLA be? We have to wait until Wednesday, Oct. 14, 2026, to find out. That’s when the U.S. Bureau of Labor Statistics (BLS) is scheduled to release its Consumer Price Index report for September. Shortly after this report is released, SSA will announce next year’s COLA amount.
It’s probably safe to assume that the COLA won’t be lower than the 3.5% projected by TSCL and Mary Johnson. The odds appear to be pretty good that it could be even bigger.
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