Social Security COLA Projections Drop as Inflation Eases in June
Cooling inflation in June changed projections for the Social Security Cost of Living Adjustment (COLA) for 2027.
The nonpartisan senior citizen group The Senior Citizens League (TSCL) projects COLA will be 3.8% this year, unchanged from last month’s forecast, but still 1% higher than the official 2026 target of 2.8%. If the projected TSCL 2027 COLA goes into effect today, average benefits will increase by $73.62, or from $1,937.53 to $2,011.15.
Meanwhile, Mary Johnson, an independent Social Security and Medicare analyst, projects the 2027 COLA at 3.7% as inflation eased in June. Today’s figures come amid a cooling of inflation last month, when petrol prices fell after a sharp rise in April and May. The Bureau of Labor Statistics (BLS) refused to do so Consumer Price Index (CPI) to 3.5% in June, with gasoline prices down 9.7% over the month.
“This is a significant drop in inflation that we have rarely seen in June CPI data over the past five years,” Johnson said. With the latest inflation data, Johnson revised her estimates up a full percentage point from 4.7%.
However, renewed war with Iran could make that relief short-lived, Johnson noted. US President Donald Trump recently announced the end of a ceasefire that had suspended tensions in Iran and said the US would resume fighting over the Strait of Hormuz.
“With continued tensions with Iran in the Strait of Hormuz weighing on oil prices, it is unclear whether this fall in inflation will persist,” says Johnson. “Consumers who want a price cut may not yet feel it has happened.”
Congress reintroduces the Social Security Act of 2100
The latest predictions coincide with efforts by lawmakers to provide austerity relief with proposed legislation. In June, Congress reintroduced Social Security Act 2100, a bill that increases and expands Social Security benefits for retirees. This includes a 2% increase in benefits for all Social Security beneficiaries, an increase in benefits to low-income seniors, and the elimination of the Windfall Exclusionary Provision (WEP) and the Government Pension Allowance (GPO) for government employees.
It would also change the COLA calculation to the CPI for the elderly (CPI-E) rather than the CPI for urban wage earners (CPI-W). While the CPI-W tracks inflation for urban wage earners, the CPI-E highlights the spending habits of the elderly. Defenders argue that switching formulas better captures the spending and saving realities of today’s retirees.
TSCL says the legislation, if passed, would extend Social Security’s solvency by another 32 years because it would increase the payroll tax on taxpayers with annual incomes over $400,000.
“Now we have a great opportunity to act 2026 Social Security Trustees Report The program’s trust fund is projected to become insolvent in the 4th quarter of 2032, leading to automatic benefit cuts,” said TSCL Executive Director Shannon Benton. “Congress will almost certainly have to pass a bill to fund the program in the next few years, providing an excellent opportunity to simultaneously shore up benefits for the next 100 years and continue the program’s legacy.”
Three-month countdown
Next month’s data will begin a three-month countdown to the release of the official 2027 COLA figure. The COLA is determined by inflation in the third quarter of the year, from July to September.
The Social Security Administration (SSA) will add up each month’s inflation numbers, determine an average, and compare it to the previous year’s average.
The next COLA forecast will be released on August 12.
