More than three-quarters of older Americans fear next year's Social Security cost-of-living adjustment (COLA) will be insufficient to keep up with rising prices, according to a new survey released ahead of Wednesday's announcement.
The research from AARP, an advocacy group for the over 50s, found that 76 percent of Americans aged 50 and older believe a projected 3.5 percent increase in benefits for 2027 would not adequately compensate for rising living costs. Among current Social Security recipients, that figure rose to 80 percent.
Meanwhile, 71 percent of respondents said an increase of between 5 and 8 percent would be sufficient to help beneficiaries afford everyday expenses. Across political affiliations that view was fairly consistent, with 73 percent of Democrats, 70 percent of independents and 69 percent of Republicans saying the same.
The survey, conducted among 1,023 adults between September 17 and 21, comes as the Social Security Administration (SSA) prepares to announce its annual COLA on October 14.
Current estimates suggest benefits could rise by approximately 3.6 percent in 2027; it could deliver the largest increase since the 8.7 percent adjustment in 2023. However, even a comparatively large increase may provide limited relief for older Americans who have struggled with this year's rising cost of essential expenses.
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Why the COLA Might Not Be Enough?
Although the annual COLA is intended to protect Social Security beneficiaries from inflation, the increase does not necessarily reflect the financial pressures experienced by individual retirees, experts say.
Geoffrey Schmidt is a certified public accountant, registered Social Security analyst and founder of Holy Schmidt! He told Newsweek the adjustment should be viewed as compensation for rising prices rather than additional income.
"A 3.5 percent increase isn't a raise; it's reimbursement for inflation that has already occurred. And, even as the biggest increase in four years, it isn't a windfall for anyone," Schmidt said. "At a 3.5 percent increase, the average payment increases about $70.
"This becomes even more obvious if the recipient's other sources of income have not kept pace with inflation. A corporate pension, for example, usually is not adjusted for inflation."
The latest Bureau of Labor Statistics data, published in September, shows consumer prices rose 3.4 percent over the 12 months ending in August 2026. Energy costs increased 16.3 percent over the same period, while food prices rose 2.7 percent and shelter costs increased 3 percent.
For retirees living on relatively fixed incomes, these increases can place pressure on household budgets, particularly when spending is concentrated on necessities.
"Over time, Social Security has not kept up with a retiree's personal inflation in many cases," Schmidt said. "The reason is that inflation measures a change in a general basket of goods and services, but the categories that dominate a retiree's budget are highly concentrated in healthcare, housing and utilities."
Medicare can also eat into what certain recipients get, with Part B premiums typically deducted directly from Social Security payments. The standard monthly Medicare Part B premium increased from $185 in 2025 to $202.90 in 2026, an increase of approximately 9.7 percent, compared with the 2.8 percent Social Security COLA implemented this year.
The 2026 Medicare Trustees Report projects a standard monthly Part B premium of $209.50 in 2027, although the final amount has not yet been announced.
But, still, this additional cost can reduce the amount beneficiaries actually receive following a COLA.
"The biggest disconnect is that Medicare Part B premiums don't come out until November, and these premium increases are not capped at the same rate as COLA," Schmidt said.
Most beneficiaries whose premiums are deducted from Social Security are protected by a provision preventing their Part B premium increase from exceeding their Social Security benefit increase in dollar terms.
However, this does not prevent Medicare costs from absorbing at least part of the adjustment, according to the Medicare trustees.
How Is the COLA Calculated?
Social Security's annual cost-of-living adjustment is determined using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in the prices of goods and services.
The adjustment is calculated by comparing the average CPI-W during July, August and September with the average for the same three months in the previous year. The resulting percentage increase, rounded to the nearest 10th of a percentage point, determines the following year's COLA. If there is no qualifying increase in the index, benefits do not receive an inflation adjustment.
However, the CPI-W measures spending patterns among working households rather than specifically tracking retirees' expenses. Seniors groups have argued using the CPI-W does not accurately reflect the costs faced by older Americans, who may spend a greater proportion of their incomes on healthcare and other essentials.
While this year's boost is larger than the last couple of years, it is not among the highest boosts. Social Security beneficiaries received an 8.7 percent increase in 2023, following the inflation surge owing to the coronavirus pandemic. Subsequent adjustments fell to 3.2 percent in 2024, 2.5 percent in 2025 and 2.8 percent in 2026.
Who Gets the COLA?
The adjustment applies to the 75.9 million people receiving some form of benefits from the SSA, including retired workers, eligible spouses, survivors and children.
The average retired worker received $2,087.52 per month in August. A hypothetical 3.5 percent adjustment to that amount would deliver approximately $73 more per month, or $876 annually, before any applicable deductions. Actual increases will vary depending on each person's benefit amount.
Recipients of Supplemental Security Income (SSI), a federal program providing financial assistance to eligible people with limited income and resources who are older, blind or disabled, also receive the adjustment. Social Security Disability Insurance (SSDI) recipients will do as well.
When Will the COLA Be Announced?
The SSA is expected to announce the 2027 COLA on Wednesday, October 14, following the release of September's inflation data.
The Bureau of Labor Statistics has scheduled its September Consumer Price Index report for 8:30 a.m. Eastern Time, providing the final inflation figures needed to calculate the adjustment. The confirmed percentage will determine how much Social Security and SSI benefits increase next year.
The new COLA will be reflected in Social Security payments beginning in January 2027. SSI recipients will generally receive their increased January payment at the end of December 2026.
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Ben Kelly and James Debens