AARP Forecasts 3.6% Social Security Cost-of-Living Increase

The Social Security Administration is scheduled to announce the 2027 cost-of-living adjustment (COLA) on October 14, 2026. Current projections suggest an increase between 3.5% and 3.6%, which would mark a significant rise over the 2.8% increase provided in 2026.

Forecasts are based on Consumer Price Index for Urban Wage Earners and Clerical Workers data from July and August, both of which recorded inflation rates of 3.4%. While the Senior Citizens League recently lowered its estimate to 3.5%, AARP maintains a forecast of 3.6%. For a beneficiary receiving the average monthly payment of approximately $2,071 to $2,086, a 3.6% increase would add about $75 per month.

Analysts warn that these increases may not fully offset rising food and freight costs driven by record-high diesel prices, particularly for the 14% of retirees who rely on Social Security for 90% or more of their income. Furthermore, the net amount retirees receive remains uncertain until November, when the Centers for Medicare & Medicaid Services announces 2027 Medicare Part B premiums, which could offset the COLA raise for high-income enrollees and new recipients.

Long-term concerns persist as the program faces a projected funding shortfall in late 2032, which could reduce payouts to 79% of current levels. Proposed solutions to sustain the program include increasing the retirement age or raising the current wage level cap of $184,500.