Key Points
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Social Security’s highly anticipated cost-of-living adjustment (COLA) will be revealed on Oct. 14.
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Independent estimates are calling for the sixth-largest percentage increase in benefits over the last 35 years.
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Three variables are boosting Social Security payouts in 2027, including President Donald Trump’s policies.
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The most anticipated announcement of the year for Social Security’s more than 71 million traditional beneficiaries is just over two weeks away. On Wednesday, Oct. 14, the U.S. Bureau of Labor Statistics will publish the September inflation report, providing the last data point needed to calculate Social Security’s 2027 cost-of-living adjustment (COLA).
Social Security’s COLA is essentially a “raise” passed on to recipients that accounts for the inflationary pressures they’ve faced over the last year. If benefits don’t keep pace with inflation, the purchasing power of Social Security income would decline over time.
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But next year’s COLA is shaping up as something special. According to estimates from The Senior Citizens League, a nonpartisan senior advocacy group, and independent Social Security and Medicare policy analyst Mary Johnson, Social Security’s 2027 COLA should be 3.5%. This would tie for the sixth-largest raise over 35 years.
President Trump’s policies are directly affecting Social Security checks. Image source: Official White House Photo by Joyce N. Boghosian, courtesy of the National Archives.
Three unique factors are driving this outsize benefit boost, two of which trace back to President Donald Trump.
1. Trump’s tariff and trade policy
The first Social Security “Trump bump” comes courtesy of the president’s tariff and trade policy.
In April 2025, Trump unveiled his “Liberation Day” tariffs, which included a sweeping global duty and higher reciprocal tariffs on dozens of countries. Even though the U.S. Supreme Court invalidated these tariffs in February 2026, they lifted consumer prices last year, leading to a modestly higher Social Security COLA in 2026.
The same dynamic is in play for 2027. In July, the Trump administration reinstated sweeping tariffs (using a different justification) on more than 80 countries. Adding duties to unfinished imported goods can increase production costs, which, in turn, lead to higher consumer prices, an uptick in inflation, and a higher COLA.
2. The Iran war
Social Security is also set for a Trump bump due to the ongoing Iran war.
Shortly after military operations commenced on Feb. 28, Iran shut down the Strait of Hormuz to virtually all commercial vessels. Closing this global chokepoint for crude oil transport sent energy prices soaring. Last week, diesel prices reached an all-time high of $6.53 per gallon, according to AAA.
But the Iran war isn’t just an energy issue. Although higher fuel prices are having the most visible impact on consumers’ wallets, core inflation data suggest that the inflationary effects of this conflict have reached the broader economy. Businesses are being forced to reroute shipments, change suppliers, and pay more for petroleum-based goods (e.g., plastics), and these costs are being passed on to consumers.
Image source: Getty Images.
3. The AI infrastructure build-out
The third unique factor that’s expected to deliver the sixth-largest cost-of-living adjustment since 1993 is the artificial intelligence (AI) infrastructure build-out.
On the one hand, the AI data center build-out has been a godsend for Wall Street and investors. The insatiable demand for graphics processing units (GPUs) and high-bandwidth memory (HBM) has sent AI stocks into the stratosphere and provided these companies with never-before-seen pricing power.
But from a consumer’s perspective, the AI revolution isn’t good news. Higher price points fueled by persistent GPU and HBM supply shortages have worked their way downstream to consumers.
We’re also witnessing a proverbial dogfight for capital among AI hyperscalers, which, according to Fed Chair Kevin Warsh, sports some of the blame for the significant rise in long-duration bond yields.
In other words, Donald Trump and AI are behind one of the largest projected Social Security raises in decades.
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