Social Security watchers largely see next year's COLA landing in the mid 3s. The Senior Citizens League and independent analyst Mary Johnson both peg it at 3.5%, while AARP is calling for 3.6%. Johnson said a very stiff inflation reading could push the figure to 3.6%, and a softer print could pull it to 3.4%. The formal announcement is expected Wednesday with the latest government inflation report.
Plenty of retirees are skeptical that an increase in that range will keep up with real-life bills. In an AARP survey of 1,023 adults age 50 and up, conducted Sept. 17 to 21 with a 4.25% margin of error, 76% said a 3.5% COLA would not be enough. Seven in ten said a 5% to 8% bump would feel more sufficient.
Donna Dalrymple, a 70-year-old retiree in Manchester, New Hampshire, said, "I would love it if the cost-of-living increase was more generous," noting she started Social Security and 401(k) withdrawals at 65 following a cancer diagnosis.
A 2027 increase around 3.5% would top the 2.8% raise beneficiaries received in 2026 but still sit well below the outsized gains during high inflation earlier this decade. The 2023 COLA jumped 8.7% - the biggest in four decades - after prices surged, and 2022 delivered a 5.9% increase as inflation climbed. Over the last decade, cost-of-living increases have averaged about 3.1%, according to the Social Security Administration.
Since 1975, the government has calculated annual COLAs for both Social Security and Supplemental Security Income, and in years with little or no inflation, the increase has at times been zero. If 2027 lands at 3.5%, the Senior Citizens League estimates the typical monthly check would rise by $67.90 to roughly $2,008 from $1,940.
Cost-of-living adjustments decide real income for tens of millions. Market Briefs covers that calculation free every morning.
The COLA is automatic, but your take-home amount depends on what gets deducted first. Standard premiums for Medicare Part B are projected to rise in 2027 to $209.50 a month from $202.90 in 2026. Part B generally pays for covered medical care and preventive services.
Higher earners may face extra monthly charges known as Income-Related Monthly Adjustment Amounts. Separately, a KFF analysis expects modest premium increases for Medicare Part D prescription plans next year, and those payments can also come straight out of Social Security checks.
That is why some retirees worry that a bigger COLA still may not stretch far enough. "If Medicare cost eats up the cost of living [adjustment], I'm really going to get slammed by the affordability crisis because rents are going up, groceries are going up, gas is going up," Dalrymple said. She added that she doesn't believe she is eligible for the one-time $90 payment discussed below.
The Trump administration recently announced $90 one-time direct payments intended to defray monthly premium expenses for more than 20 million people enrolled in Medicare Part B. Social Security Administration Commissioner Frank Bisignano told CNBC's Squawk on the Street that the $90 payments reflect the administration "taking care of Americans" and working to keep vulnerable groups, including older adults, out of poverty. "People are very, very grateful for it, and they look forward to it," he said of the upcoming COLA announcement.
Questioning the Trump administration's decision to roll out the $90 payments about a month ahead of the midterm election, several Democrats - including Sen. Ron Wyden, D-Ore., the top Democrat on the Senate Finance Committee - raised concerns about its motives.
Reactions are mixed among beneficiaries. Kathy Callaghan, 80, of Montpelier, Vermont, said she'd rather see the money deposited into Medicare's trust fund - which is expected to be depleted for Part A in 2033 - instead of being mailed out as checks. She intends to give her $90 to the Senate bid of James Talarico, a Democrat and member of the Texas House of Representatives who is running for the U.S. Senate.
For your wallet, the bottom line is simple: the COLA sets the headline increase, but the real bump to your spending power depends on what Medicare takes out first and whether prescription coverage premiums inch up too. The official number Wednesday will tell you how much more is coming in, and then the Medicare math shows what sticks.
How the COLA is measured matters as much as the number. Get the free Market Briefs daily newsletter and follow it.
