Social Security 2027 COLA Projected at 3.6% With a Trump Bump

Analysts project a 3.6% Social Security COLA for 2027, driven by tariff and Iran war inflation, but a bigger raise could drain trust funds faster.

Social Security's cost-of-living adjustment for 2027 is expected to be well above average. The Senior Citizens League projects the 2027 COLA at approximately 3.6%, while independent analyst Mary Johnson anticipates a 3.4% increase, according to The Motley Fool. Either figure would mark the sixth consecutive year in which COLAs met or surpassed 2.5% — something last seen from 1988 to 1997 — and would tie for the sixth-largest percentage increase since 1992. The official number arrives on October 14, when the Bureau of Labor Statistics publishes September inflation data, completing the third-quarter CPI-W readings the Social Security Administration uses for the formula.

What makes this raise unusual is that, for a second consecutive year, it carries what The Motley Fool calls a "Trump bump." Sweeping global tariffs — reinstated at 10% to 12.5% on select imports despite the Supreme Court invalidating the original Liberation Day tariffs in February 2026 — raise domestic production costs that get passed to consumers. The more prominent driver is the Iran war: after US strikes in February 2026, Iran closed the Strait of Hormuz for roughly six months, stymying a fifth of the world's petroleum liquids. Higher fuel and petroleum-based product costs have now spread through supply chains, pushing inflation well above the Fed's 2% target.

The COLA formula requires July, August and September inflation figures. According to Newsweek, August CPI data due September 11 will mark the fifth of six required data points, letting forecasters sharpen their estimates. The Motley Fool notes July PCE inflation hit 3.7%, above expectations, with core PCE at 3.3%. A hotter August print could push forecasts above 3.6%; cooling could lower them. Experts caution a bigger check isn't a windfall: Alex Beene told Newsweek that a larger adjustment sounds like good news, but COLA is essentially reimbursement for inflation already experienced, and rising everyday costs can consume much of the extra money.

According to The Motley Fool, a larger-than-normal COLA could accelerate depletion of the Old-Age and Survivors Insurance trust fund, which the 2026 Trustees Report projects will exhaust its asset reserves by the fourth quarter of 2032. The program faces a $29.3 trillion long-term unfunded obligation, up more than $4 trillion year over year, and trustees model relatively modest COLAs into their forecasts — making a 3.4% to 3.6% raise far from modest. If reserves run out on schedule, the report warns, sweeping benefit cuts of about 22% may be needed to sustain payouts. For beneficiaries, the near-term math is modest: a 3.6% adjustment would lift the average monthly retirement benefit from about $2,086 to roughly $2,161, around $75 more before Medicare deductions, per figures cited by Newsweek.