US Inflation Sparks Renewed Speculation on 2027 Social Security COLA

The latest inflation data from the US has sparked renewed speculation about the size of the 2027 Social Security Cost-of-Living Adjustment (COLA). The Consumer Price Index (CPI) rose 0.4% in August, more than expected, and is now up 3.4% compared to the same month last year.

The higher-than-expected inflation rate has led to revised predictions for the 2027 COLA, with estimates ranging from 3.4% to 3.6%. The Senior Citizens League and AARP have both released their latest estimates, with the latter predicting a 3.6% increase based on August's inflation data.

The Social Security Administration (SSA) uses a complex formula to calculate the COLA, which takes into account the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) over July, August, and September compared to the same period in the previous year.