Retirees could be on track for more money in 2027 if they are collecting Social Security. In fact, the average Social Security recipient could collect an extra $97 per month — or more — if early predictions of a big Social Security change pan out in the upcoming year.
Here’s why the typical retiree is on track for almost $100 more from Social Security after the New Year rolls around.
Why Social Security retirees could see a big benefits bump in 2027
Social Security retirees are potentially looking at a big increase in their monthly benefit next year because the cost-of-living-adjustment (COLA) likely needs to be a large one in order to help ensure benefits keep up with inflation.
COLAs are awarded most years and are calculated based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Third-quarter CPI-W is the data that counts, but CPI numbers have already been released for each month that has passed so far in 2026. Experts have estimated what the 2027 COLA will look like based on the trends shown by the early numbers, and the COLA is likely to be much larger for next year than the 2026 increase.
Specifically, Mary Johnson, an independent Social Security analyst, has estimated a COLA as high as 4.7% while the Senior Citizens League has estimated a 3.8% benefits increase. These are the estimates as of the most recent CPI-W numbers, which showed inflation surging in large part because of energy prices increasing dramatically due to the conflict in Iran. Based on Johnson’s estimate, a senior who is receiving the average benefit of $2,071 per month in 2026 would see their benefits rise by $97.34 per month in the upcoming year.
That’s a substantial increase in monthly Social Security income.
A large raise isn’t necessarily great news for seniors
A raise of nearly $100 may come as welcome news to seniors struggling with inflation, but a deeper understanding of the reality of COLAs reveals that this is not an ideal outcome. Remember that benefit adjustments are directly based on inflation. Higher COLAs happen when higher inflation is occurring, and higher inflation is never good for seniors who likely also rely on retirement accounts to produce supplementary income.
Often, seniors invest their 401(k) funds or other retirement assets in relatively conservative assets because they can’t afford to take on too much risk. After all, they must make regular withdrawals to provide income to pay the bills. Conservative portfolios struggle to keep up with high inflation, which means retirees may find that their buying power from other income sources is reduced.
Of course, the COLA numbers are not final yet, and things could change. Inflation could return closer to the target level of around 2% if the Iran conflict ends and oil flows freely, and the COLA will be smaller if that occurs. Or inflation could continue to surge, pushing the adjustment even higher and putting retirees in greater peril of their income from other sources, buying them far less.
Retirees should keep careful tabs on the upcoming economic news, including BLS releases for the coming months, to see which way the COLA and inflation are trending. It may also be wise to speak with a financial advisor about what the large COLA means for their financial situation.
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