Retirement Social Security

Why Social Security COLA Estimates Keep Changing

Energy costs and more are behind conflicting COLA estimates.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated Sept. 16, 2026

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If Social Security payments are part of your retirement plan, you may be following the news about the predicted 2027 Social Security COLA. Different numbers are released every week, so keeping up with the latest information can be confusing. Analysts have issued multiple revised projections for the 2027 COLA in just the past few months, and nothing is definite yet.

Here's what to know about the 2027 COLA, why the numbers keep changing, and when to expect some final answers.

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What is the Social Security COLA

The cost-of-living adjustment (COLA) is a calculation that adjusts Social Security benefits and helps them keep up with inflation. If inflation rises, the COLA may increase to help Social Security beneficiaries cover higher living costs. If inflation doesn't rise, the COLA isn't implemented, and Social Security benefits remain at the same rate, as happened in 2016.

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How the COLA is calculated

The Social Security Act outlines a specific formula that is used to calculate the COLA each year. The calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which the U.S. Bureau of Labor Statistics (BLS) calculates.

The 2027 COLA is based on the average CPI-W for July, August, and September 2026 compared with the average for those same months in 2025.

Estimated projections for the 2027 COLA

Since the final inflation data used to calculate the 2027 COLA are not yet available, analysts are making and adjusting their COLA predictions based on the latest economic data.

Earlier estimates were based on inflation data from the first part of the year. Now that July and August CPI-W data are available, forecasts have narrowed considerably, although the final number still depends on September's reading.

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Energy price spikes

Energy and fuel prices affect inflation rates, and the Iran conflict sent energy prices surging in March. In fact, CPI-W inflation measured 2.2% in January and February, then rose to 3.3% in March. In April, it reached 3.9%, driven by increased energy and fuel costs. Rising food prices, which may also be impacted by fuel costs, contributed to the inflation surge.

Tariff-driven goods inflation

Trump's tariffs contributed to higher goods prices, which increased overall inflation. According to an analysis by The Budget Lab, imported core goods and durable goods prices rose by 1.5% during 2025 through January 2026.

In March 2026, the Joint Economic Committee released data predicting that if the tariff revenue remains at the same level recorded in January 2026 for the rest of the year, an American family is projected to pay more than an average of $2,500 in tariffs.

Cooling inflation data

Inflation remains an important factor in next year's Social Security increase. The Sept. 11 CPI-W data showed August prices up 3.5% from the baseline used to calculate the 2027 COLA. With only September's reading left, current forecasts are clustering around a 3.5% COLA.

The Federal Reserve is also watching inflation closely. Its Sept. 15–16 meeting is expected to result in a quarter-point rate increase, although the decision hasn't been announced yet.

The Fed's decision won't directly determine the Social Security COLA. That calculation depends on CPI-W data from July, August, and September. For now, 3.5% remains a reasonable estimate, but the official COLA won't be known until October.

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Different analyst methodologies and timing

Even the individuals and groups predicting COLA, and when they make those predictions, can produce different estimates. The Senior Citizens League and analyst Mary Johnson of Johnson Advisor & Research are two frequently cited sources for early COLA projections. As of September 2026, the Senior Citizens League and Johnson both estimated the 2027 COLA to be 3.5%.

Other forecasters' projections aren't far off. For example, AARP estimated a 3.6% COLA, and the Committee for a Responsible Federal Budget predicted 3.4%.

Analysts may use different methodologies, leading to different calculations, and the data they use may also vary. That's why it's helpful to consider multiple projections and remember that these projections are estimates that can change. That's also why you see so many different estimates from different outlets.

Bottom line

The Social Security Administration typically releases the official COLA in October each year, and it doesn't incorporate inflation data before July into that calculation. The projections may help you plan for 2027, but they can still change with September's inflation data. The official COLA is expected to be announced in October after the September CPI-W data are released.

If you're worried about inflation's effects on your retirement planning, consider speaking with a financial advisor. A skilled advisor may be able to review your retirement plan, offer advice on maximizing your senior benefits, and help you prepare for retirement.

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