March 18th Is The Date Social Security Retirees Need to Watch If They Care About COLA

Each year, retirees eagerly await news of the Cost of Living Adjustment (COLA). COLAs help to ensure that retirees don’t lose buying power over time. Since prices go up steadily, Social Security benefits also need to increase too because otherwise checks would purchase less each year.

The official announcement regarding the 2027 COLA is a very long way away. That’s because Cost of Living Adjustments are calculated based on third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Once the September data is out in mid-October, the Social Security Administration will provide details on how much the COLA will be. 

This doesn’t mean there aren’t clues throughout the year, though. In fact, there is some news coming on March 18 that will provide some insight for seniors into how much of a benefit increase they may be in line for in 2027.

Why March 18 is an important day for COLA news

March 18 is a key day for retirees to watch because that’s the day the Federal Reserve is going to make an announcement regarding whether it is going to increase interest rates, reduce interest rates, or hold rates steady. 

The Federal Reserve is the U.S. central bank that helps to control the money supply. It sets a benchmark rate, or an overnight rate at which banks can borrow from each other. While this benchmark rate does not directly control interest rates for consumers, it does control how cheap or expensive borrowing is in general — and that trickles down to consumer lending.

Perhaps more importantly for retirees, though, is the fact that the Federal Reserve considers key economic data in making its decision on rates, including both inflation and employment data. If the Fed believes that inflation is under control, then it is far more likely to lower rates — especially if the jobs numbers aren’t good and unemployment looks to be rising. 

Since inflation is the key factor that determines the amount of the COLA, retirees can look to the Federal Reserve’s upcoming rate decision for a clue as to how the numbers are trending and whether they’re likely to be in line for a big raise or a small raise. If inflation looks like it’s becoming less of an issue, they can expect a smaller COLA than the 2.8% raise they received in 2026. 

The truth about Social Security Cost of Living Adjustments

At first glance, it might seem like a smaller Cost of Living Adjustment is a bad thing. In reality, though, it really isn’t. Seniors have to remember that a big COLA doesn’t mean they are getting a lot of extra money to spend. While it is true their checks are going up by a higher amount, the fact is that the benefits increase is only intended to help them keep pace with rising prices — not give them more buying power like a traditional raise would. 

This means a larger raise only comes when costs are going up. And since seniors tend to have money coming from other sources that are not indexed to inflation and that don’t automatically increase when prices go up, retirees in general are better off when the COLA is low. So, seniors should watch for signs from the Fed that inflation is cooling because even if that means a smaller COLA, it could be good news in the end.