Key Points
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The wait is nearly over, with Social Security’s highly anticipated cost-of-living adjustment (COLA) set to be announced on Oct. 14.
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Two of President Trump’s policies are boosting the prevailing inflation rate, which, in turn, should yield one of the largest COLAs over the last 35 years.
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Furthermore, tens of millions of retirees are set to enjoy a rare silver lining in 2027.
The wait is nearly over for Social Security’s more than 71 million traditional beneficiaries. In less than two weeks, on Oct. 14, the release of the September inflation report will provide the final data point needed to calculate Social Security’s 2027 cost-of-living adjustment (COLA).
In simple terms, Social Security’s COLA is the near-annual raise given to recipients to offset the inflationary pressures they’ve faced over the last year. For instance, if a broad basket of goods and services regularly bought by seniors rises in cost by 3% from one year to the next, Social Security benefits would need to increase by the same percentage to avoid a loss of buying power. Social Security’s COLA is the mechanism that combats a loss of purchasing power over time.
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While annual benefit increases are normal, next year’s cost-of-living adjustment is on track to be something special, courtesy of President Donald Trump. The president’s policies are set to boost benefits (i.e., a “Trump bump”), leading to history (likely) being made three different ways.
One of the largest Social Security raises since 1993
To begin with, Social Security’s traditional beneficiaries — retired workers, workers with disabilities, and survivors of deceased workers — should receive one of the largest payout boosts over the last 35 years. The catalyst for this nominal boost in monthly payouts is two of Trump’s policies: tariffs and the Iran war.
With regard to tariffs, it’ll mark the second consecutive year they’ve led to a Trump bump. The president’s “Liberation Day” tariffs, announced in early April 2025, introduced sweeping global duties and higher reciprocal tariffs on dozens of countries. Despite these tariffs being overturned by the U.S. Supreme Court in February 2026, their impact on consumer prices last year provided a modest lift to Social Security’s 2026 COLA.
BREAKING: August CPI inflation comes in at 3.4%, in-line with expectations of 3.4%
Core CPI inflation falls to 2.4%, also in-line with expectations of 2.4%.
Month-over-month CPI inflation rose +0.4%, the biggest increase since May 2026.
Treasury yields are rising on the news.
— The Kobeissi Letter (@KobeissiLetter) September 11, 2026
The same story applies to next year’s projected cost-of-living adjustment. The Trump administration unveiled sweeping global duties on more than 80 countries in late July. Adding duties to unfinished imported goods, such as steel, can increase manufacturing costs and boost consumer prices.
The Trump-led Iran war is the other major source of inflation. A nearly persistent seven-month closure of the Strait of Hormuz has created the largest energy supply disruption in modern history. Fuel prices have soared in its wake.
