A customer buys produce at an HEB grocery store in Austin, Texas, May 11, 2026.
Brandon Bell | Getty Images
Consumer prices rose in May, pushing annual inflation to the highest level in three years, according to new government data.
That points to a 4.7% cost-of-living adjustment for Social Security by 2027, according to a new estimate from Mary Johnson, an independent policy analyst for Social Security and Medicare. Last month, Johnson predicted a 4.2% COLA next year.
“There is a high probability that it will rise to more than 4.7% as information continues to come in, especially fuel prices,” said Johnson.
The Social Security Administration usually announces the next year’s COLA in October, and the change is based on third-quarter data.
Meanwhile, the Senior Citizens League, a top nonpartisan group, now forecasts a 3.8% COLA for 2027, down from its estimate of 3.9%. The forecaster did not see a reason for the decline, and the Senior Citizens League did not respond to a request for comment.
By 2026, about 75 million Social Security and Supplemental Security Income beneficiaries would see a 2.8% increase in their monthly checks with cost-of-living adjustments.
But while that increases the average $2,000 monthly benefit by about $56, beneficiaries would need a $94 monthly raise to keep up with inflation, according to Johnson.
The annual COLA has averaged about 3.1% over the past decade, according to the Social Security Administration.
The Social Security COLA is calculated using a subset of the consumer price index known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
CPI inflation rose 4.2% in the past 12 months through May, the Bureau of Labor Statistics said Wednesday. Meanwhile, the CPI-W rose 4.4% over the past 12 months.
Price increases that affect the COLA forecast
Categories that saw the biggest jumps in CPI-W over the past 12 months include fuel oil, which rose 64.1 percent; fuel, which increased by 40.7%, and airfare, which increased by 25%.
Older Americans continue to face higher costs.
In the wake of the Covid-19 pandemic, inflation has risen to record highs, making Social Security’s biggest COLAs 5.9% in 2022 and 8.7% in 2023.
Yet while the rate of inflation has slowed, causing Social Security cost-of-living adjustments to decline in subsequent years, consumer prices have generally remained high.
A majority, or 69%, of adults 50 and older say they are worried that prices are rising faster than their incomes, according to the most recent AARP survey of financial security measures, conducted in January.
Meanwhile, 61% of older Americans say the average $2,000 Social Security payment is not enough, the survey found.
Experts and lawmakers have debated whether the CPI-W accurately reflects the values of older Americans.
Everyone has a personal inflation rate based on their spending needs and factors such as where they live.
Beef and coffee are among the grocery categories with the highest price increases in the broad consumer price index. However the average price per pound of beef varies by location.
In response to higher food prices, seniors may eat less and trade less expensive items for more expensive items, such as beef, to reduce grocery costs, Johnson said.
