RESOLVING THE LEDGER
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0 Share Newsweek is a Trust Project member See more of our trusted coverage when you search. Prefer Newsweek on Google to see more of our trusted coverage when you search. Millions of Social Security recipients are just days away from receiving a key piece of information about how much their benefits could rise in 2027.
A major deciding factor in the annual cost-of-living adjustment (COLA) calculation process is expected next week, when the Bureau of Labor Statistics releases the Consumer Price Index (CPI) report for July 2026.
It's the first of three inflation readings that will ultimately determine next year's Social Security COLA.
Forecasts say that beneficiaries could be in line for a larger increase than the 2.8 percent adjustment received in 2026.
More than 70 million Americans receive Social Security or Supplemental Security Income benefits, and the annual COLA is designed to help the payments keep pace with inflation.
For retirees who rely on Social Security to cover daily expenses, even small changes in the COLA can translate into hundreds of dollars in additional income over the course of a year.
The July inflation report is especially significant because the Social Security Administration (SSA) bases the COLA on average inflation readings from July, August and September, meaning next week's data will provide the first official indication of where the 2027 adjustment may be headed.
The Senior Citizens League (TSCL), a nonpartisan advocacy group focused on seniors, recently projected a 3.8 percent COLA for 2027 following the latest inflation data. If accurate, it would represent a noticeably larger increase than the 2.8 percent COLA that took effect this year.
“Next week's inflation report is the first piece of third-quarter data that will directly impact the upcoming 2027 Social Security COLA calculation, making it one of the most important economic announcements seniors will see before the official adjustment is announced in October,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek .
“Beneficiaries need to pay attention to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, because the recent prominent increases in energy, housing and other everyday essential costs will mostly determine the size of next year's COLA.”
The official formula compares the average CPI-W during the third quarter of 2026 with the same period in 2025. Because only one of the three required monthly readings will be available after next week's release, the COLA could still change significantly once the final calculation is complete.
“Retirees should remember that a larger COLA is not automatically better. It usually reflects higher inflation, and any gain can be offset by rising living expenses,” Beene said.
While no official increase has been determined, a 3.8 percent adjustment would provide a meaningful boost for many recipients.
According to TSCL, a 3.8 percent COLA would raise an average monthly retirement benefit by roughly $74 per month, though actual increases would vary depending on an individual's benefit amount.
“Based on where inflation sits today, I would not be surprised to see the 2027 COLA come in at or near 4 percent,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek . “Input costs remain elevated, energy prices continue to be a wild card, and geopolitical tensions in the Middle East could easily keep additional pressure on inflation.”
However, beneficiaries should keep in mind that Medicare Part B premiums, which are set separately, can offset some of the gains from a COLA increase. The amount retirees ultimately see deposited into their bank accounts may therefore be lower than the full adjustment.
The July inflation report will provide the first piece of the puzzle.
Inflation pressures tied to housing, energy and consumer goods costs could still shift the final COLA calculation higher or lower depending on what happens in August and September.
The official figure will not be known until the SSA announces the final calculation in October.
The Bureau of Labor Statistics is expected to release July's CPI data next week.
Two additional reports, covering August and September, will follow before the SSA determines the final adjustment.
“Next week's report gives us the first of those three data points and starts to paint a much clearer picture of what retirees can expect for their 2027 benefit increase,” Thompson said. “While it won't determine the final number, it will give us our first meaningful look at where the COLA is likely headed.”
Contact Newsweek editors on this story: Jason Lemon and Dave Siminoff .
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