Key Points
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Trump’s Iran war and tariffs are causing higher inflation.
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Higher inflation now could point to a higher 2027 Social Security COLA.
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However, the final COLA figure won’t be available until mid October.
Retirees received a 2.8% increase to their Social Security benefits earlier this year. However, the next cost-of-living adjustment (COLA) is likely to be significantly higher.
Social Security COLA estimates for 2027 are getting a “Trump bump,” with President Trump’s policies contributing to higher inflation. Here’s how much extra you could receive as things stand now.
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Image source: Official White House Photo by Daniel Torok.
How Trump is impacting Social Security COLA estimates
Social Security COLAs are based on inflation. To be specific, they’re calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Administration (SSA) sets the annual benefit increase by comparing the average CPI-W for the third quarter of the current year to the average for the same period in the previous year.
President Trump’s actions are directly driving inflation higher. Most importantly, his commitment of U.S. forces to aid Israel in attacking Iran led to the disruption of traffic in the critical Strait of Hormuz. This disruption caused oil prices to skyrocket. Largely due to higher energy costs, the CPI-W for May jumped to 4.4%.
The president’s tariffs and trade policies also continue to contribute to higher inflation, albeit to a lesser extent than the Iran war. The nonpartisan Tax Foundation recently estimated that, even after the Supreme Court overturned Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA), Trump’s tariffs will cost the average U.S. household around $700 in 2026.
There’s no mistaking the impact of President Trump’s actions on Social Security COLA estimates. Before the Iran war began, The Senior Citizens League (TSCL) projected a 2027 COLA of 2.8%, matching last year’s increase. TSCL now forecasts a 3.8% increase in Social Security benefits next year. Independent analyst Mary Johnson’s 2027 COLA estimate was 1.7% before the war began. She now projects a COLA of 4.7% or more.
How much could your benefits increase
The average monthly Social Security benefit for retired workers as of January 2026 was $2,071. If TSCL’s estimate of a 3.8% COLA is on target, the average increase in 2027 will be around $78.70 per month, or $944.38 per year. If Johnson’s 4.7% projection is accurate, the average retiree could see an extra $97.34 per month, or $1,168.04 per year.
However, the actual 2027 COLA amount won’t be known until October, after the third-quarter inflation numbers are released. It’s possible that an end to hostilities with Iran and the reopening of the Strait of Hormuz could lead to lower inflation in Q3. But retirees should still anticipate a “Trump bump” to their Social Security benefits next year — and perhaps one of the biggest COLAs in several years.
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