Social Security COLA: May Inflation Numbers Boost Increase to 3.8% -- and It's Not Enough
Stubbornly high inflation could push Social Security’s annual cost-of-living adjustment (COLA) to its highest level since 2022, according to the most recent estimates.
Here’s a look at what next year’s COLA could look like following the latest inflation numbers.
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Latest COLA Estimate
The Senior Citizens League, a non-partisan advocacy group, estimates that Social Security’s 2027 COLA will be 3.8%, or one percentage point higher than the current COLA of 2.8%.
If that estimate holds, it will be the highest COLA since 2023. That year, the annual adjustment was a whopping 8.7% due to historically high inflation.
The TSCL’s latest estimate is based on Consumer Price Index (CPI) numbers for May 2026, which the U.S. Bureau of Labor Statistics (BLS) released early Wed., June 10. Overall inflation in May climbed 0.5% from the previous month and 4.2% from the previous year.
The 4.2% annual increase was the largest such gain in three years, Reuters reported. It was mainly driven by a huge spike in energy prices tied to the war in Iran. The energy index climbed 23.5% year-over-year.
Meanwhile, seniors continue to face rising prices in categories that have a particular impact on their budgets, including the following:
Electricity: Up 5.9% year-over-year in May
Transportation services: up 4.1%
Medical care services: up 3.6%
Food at home: up 2.7%
“The rise in medical care services is impacting consumer prices and that’s concerning,” Jeffrey Roach, Chief Economist for LPL Financial, wrote in an email shared with MoneyLion. “But on an encouraging note, health insurance costs have declined year over year for the last six months.”
COLA Progression
Despite May’s high inflation numbers, the TSCL’s current COLA estimate is down slightly from its prior estimate of 3.9%, which was based on April’s inflation numbers.
However, the COLA projection is much higher than earlier in the year, when estimates were 2.8% following the March and February inflation reports.
The actual 2027 COLA won’t be determined until after this year’s third-quarter inflation numbers have been released, meaning it could be higher or lower than the current estimate.
Here’s a look at the annual COLA over the past five years, according to the Social Security Administration:
2022: 5.9% (based on 2021 inflation data)
2023: 8.7%
2024: 3.2%
2025: 2.5%
2026: 2.8%
‘Won’t Be Enough’
Although a 3.8% COLA would represent the biggest bump since 2023, it still might not provide much financial relief for seniors, according to TSCL Executive Director Shannon Benton.
“A 3.8 percent COLA might sound like a lot compared to last year’s 2.8 percent, but it won’t be enough to make up the difference between what seniors bring in and what they need to live with dignity,” Benton shared in a press release.
She cited the fact that inflation keeps rising even as more than half of U.S. seniors “can’t afford” basic living standards.
“We’re talking about food, a roof over their head, and transportation,” Benton said. “Many seniors already have to skip doctor’s appointments due to costs, which costs all of us more in the long run when we swap preventative care for emergency care … Congress and the president must raise benefits so seniors can meet basic cost-of-living standards, for the good of the entire country.”
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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