Social Security COLA Projected at 3.5% for 2027

Rich Johnson, vice president for financial security at the AARP Public Policy Institute, said the early forecast is meant to let seniors plan sooner. "Family budgets have been under increasing pressure because of rising prices," he said. He also cautioned that the number can still move: "There's a lot of uncertainty about how food and especially energy prices will play out over the next two months. This is not set in stone."

Kevin Thompson, CEO of 9i Capital Group, told Newsweek the pressure is global. "Due to the Iran conflict, the continued Russia-Ukraine war, and significant climatological shifts, we are seeing price pressures across the globe, whether it's grain, meat, or agricultural inputs such as fertilizer and compost," he said.

Finance expert Michael Ryan, founder of MichaelRyanMoney.com, told Newsweek a bigger COLA is not a win. "A bigger COLA sounds like good news, but it usually means seniors just paid a higher price to stand still," he said. "The adjustment is responding to inflation that already happened. It isn't really a raise in purchasing power." Ryan added that the number that matters is "what is left after Medicare and the expenses they actually pay every month."

Indivar Dutta-Gupta of the National Academy of Social Insurance told News4Jax that price growth is being driven largely by tariffs and an energy spike tied to the conflict in Iran, effects that are "rippling through the economy." He said older Americans feel it "most acutely in groceries, energy, housing and health care." His colleague Tyler Bond said the 2027 COLA "will be particularly important" with the near-term outlook so uncertain, and that it also "buttresses consumer spending."