New Social Security COLA estimates released after fresh inflation data

Key Points:

• Social Security beneficiaries are projected to receive a larger cost-of-living adjustment (COLA) in 2027 than in 2026, with estimates ranging from 3.2% to 3.6%, despite inflation easing slightly in July.
• The COLA is calculated using the Bureau of Labor Statistics' CPI-W data for July, August, and September, with July's inflation rate recorded at 3.4%, down from 3.5% in June.
• The Committee for a Responsible Federal Budget (CRFB) forecasts a 3.2% COLA and highlights concerns about Social Security's solvency, warning that automatic benefit cuts of 22% could occur if the fund is depleted in six years.
• Advocacy groups like AARP and The Senior Citizens League (TSCL) estimate higher COLAs of 3.5% and 3.6%, respectively, emphasizing the uncertainty in inflation trends, especially regarding food and energy prices.
• Proposals to reform COLA calculations, including caps for high-income beneficiaries, aim to improve Social Security's financial stability amid ongoing inflation volatility.