Social Security's 2027 Raise Could Hit 3.6%, the Biggest Since 2023, With Official Number Due October 14

Since AARP first projected a 3.5% COLA for 2027 back in August, that estimate has ticked up to 3.6%, based on August inflation data released by the Bureau of Labor Statistics. The Social Security Administration will not make it official until October 14, when the agency releases both the September inflation report and the final 2027 cost-of-living adjustment on the same day.

Three groups have weighed in with estimates in recent weeks. AARP projects 3.6%. The Senior Citizens League, an advocacy group for older Americans, put its estimate at 3.5%, down slightly from an earlier 3.6% call. The nonpartisan Committee for a Responsible Federal Budget came in lowest, at 3.4%.

Any of those numbers would mark the biggest COLA since 2023's 8.7% jump, which was driven by pandemic-era supply shocks and Russia's invasion of Ukraine. This time, according to Fortune, the pressure is coming from a different war: Mideast fighting tied to President Trump's confrontation with Iran, combined with Ukrainian strikes on Russian refineries, has pushed U.S. diesel prices above $6.50 a gallon. Diesel powers the trucks and trains that move nearly everything Americans buy, so higher fuel costs ripple into grocery and retail prices.

CBS News reported that diesel had already crossed $6 a gallon by mid-September, a record high at the time, and that the August inflation report didn't even capture the full extent of that spike. Add in chip shortages from the AI buildout, which Fortune notes has pushed companies like Apple to raise consumer electronics prices, plus Trump's continued tariff actions despite the Supreme Court striking down his IEEPA-based duties, and inflation has stayed hotter than the Federal Reserve would like.

The average retired worker collected $2,071 a month in Social Security as of January 2026, according to the Social Security Administration. A 3.6% COLA would add roughly $75 a month, pushing the average check to about $2,146 starting in January 2027.

Because the COLA is a flat percentage, retirees with higher lifetime earnings get bigger dollar increases. The Motley Fool's analysis of SSA data found New Jersey retirees have the highest median benefit at $2,256 a month, followed by Connecticut ($2,249), Delaware ($2,225), New Hampshire ($2,215), Maryland ($2,181), Washington ($2,144), Michigan ($2,139), Minnesota ($2,135), Massachusetts ($2,121), and Utah ($2,090). Those retirees will see the largest raises in raw dollar terms, even though everyone gets the same percentage bump.

A state's median benefit isn't set by geography directly. As the Motley Fool explains, benefits are based on lifetime earnings and claiming age, so states with higher median incomes tend to produce higher median Social Security checks.

Even with a bigger raise coming, Newsweek's analysis found a shortfall between projected Social Security income and the cost of living in all 50 states. Comparing a projected $25,716 annual benefit against MIT's living-wage estimates for a single adult, California showed the widest gap at $25,700 a year, followed by Hawaii ($25,055), Massachusetts ($24,981), New York ($24,139), and Washington ($21,163). New Jersey rounds out six states with shortfalls exceeding $20,000 annually.

Even in the cheapest states, the gap doesn't disappear. West Virginia has the smallest shortfall in the country, but it's still $8,283 a year. Kentucky and Arkansas follow at roughly $9,000 and $9,200. Nationwide, the average gap runs about $15,052 a year, according to Newsweek's analysis.

Shannon Benton, executive director of the Senior Citizens League, argues the annual adjustment structurally can't keep pace with what seniors actually spend money on. "No matter if the COLA announcement comes in slightly higher or slightly lower than our prediction, seniors will probably end up disappointed in the long run," Benton said, pointing to healthcare costs that outrun general inflation and a once-a-year adjustment that can't react to price spikes in real time.

That's a fair complaint on its face. Seniors on fixed incomes genuinely do spend a different basket of goods than working-age households, more on healthcare and utilities, less on things like electronics or gas for commuting. The COLA formula was designed to track a broad cost-of-living measure, not to shield any one group from every category of price increase. Changing that formula would mean either bigger benefit checks or a different tax and funding structure to pay for them.

That funding question hasn't gone away. Michael Peterson, CEO of the Peter G. Peterson Foundation, has flagged that the national debt has crossed $40 trillion and that Social Security itself faces a looming insolvency problem within the program's own trust fund. Social Security Commissioner and acting IRS Commissioner Frank Bisignano has said raising the retirement age isn't on the table under the current administration. That leaves bigger COLAs funded the same way they always have been, out of a trust fund that actuaries have warned is running toward a shortfall regardless of what happens on October 14.

The official 2027 COLA, along with the September CPI report it's based on, will be released on October 14. Until then, every number in circulation—3.4%, 3.5%, or 3.6%—is still an estimate.