The yearly cost-of-living adjustment (COLA) may be higher than in the last couple of years.
On Wednesday, October 14, the Social Security Administration will announce the COLA, and recipients will receive detailed information about their benefits in December, according to Yahoo Finance.
The Senior Citizens League (TSCL) is predicting the adjustment will be 3.5 percent in 2027. If this percentage is correct, it would make for the largest COLA increase in four years. The adjustments are made annually so Social Security benefits keep up with inflation.
“The biggest thing we’re watching with the COLA announcement coming are short-term shocks to the economy that push inflation way up or down in the next 30 days,” TSCL executive director Shannon Benton said in a statement. “Of the three CPI-W figures used to calculate the COLA, two are already in.”
According to Yahoo Finance, “COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics (BLS).”
August’s Consumer Price Index (CPI) revealed a 3.4 percent year-over-year increase in consumer prices. As the U.S.-Iran conflict continues, gas prices rose 3.9 percent last month, and “core” inflation, excluding volatile food and energy prices, rose 0.3 percent month over month, the outlet reported.
Benton warned, “No matter if the COLA announcement comes in slightly higher or slightly lower than our prediction, seniors will probably end up disappointed in the long run.”
“The reality is that older Americans allocate their budgets differently than people still in the workforce, so inflation hits them differently,” Benton claimed. “The CPI-W captures the experience of urban wage earners, which doesn’t represent the average senior’s budget.”
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