Social Security COLA 2027 estimates rise with inflation
CNBC • • business
Key Points:
- New government data indicates rising inflation, leading to forecasts of a higher Social Security cost-of-living adjustment (COLA) for 2027, potentially reaching 4.2% due to increased prices in gasoline, energy, and fresh produce.
- Independent analyst Mary Johnson raised her 2027 COLA forecast from 3.2% to 4.2%, while the Senior Citizens League increased its estimate from 2.8% to 3.9%, reflecting ongoing price pressures on consumers.
- Social Security benefits have lost 13.7% of their purchasing power since 2016, with the Senior Citizens League estimating a 15.7% increase would be needed to fully restore benefits' value, though the projected 3.9% COLA would raise average monthly benefits by about $81.
- April's Consumer Price Index (CPI) showed a 3.8% increase over 12 months, the highest since May 2023, and the CPI-W, which determines COLA, rose 3.9%, signaling continued inflationary trends.
- The official 2027 COLA will be calculated by the Social Security Administration based on third-quarter CPI-W data and announced in October, with forecasts subject to change as more inflation data becomes available.