--- title: Social Security COLA Estimate Drops After Inflation Cools description: Slowing inflation prompted a sharp cut to a leading forecast for Social Security's 2027 COLA. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 600 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Retirement - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes published: '2026-07-15T14:10:39.000Z' modified: '2026-07-15T14:10:39.000Z' section: Retirement tags: - News - Retirement word_count: 483 canonical: https://money.com/2027-social-security-cola/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Collage of COLA](https://img.money.com/2026/07/News-Inflation-cola.jpg) Social Security recipients can expect a smaller cost-of-living adjustment, or COLA, in 2027 after the annual inflation rate tumbled in June, driven by the largest drop in consumer energy prices in over six years. Mary Johnson, an independent Social Security policy analyst, significantly revised her estimate of the 2027 COLA downward. Johnson cut her forecast by a full percentage point — from [4.7% last month](https://money.com/cola-prediction-2027-social-security/) to 3.7% on Tuesday — after new data indicated that inflation slowed more than expected in June. A 3.7% COLA would deliver an average increase of $74 per month to [Social Security benefits](https://money.com/social-security-check-this-month/). The annual COLA is designed to prevent inflation from eroding the purchasing power of Social Security and Supplemental Security Income benefits for the more than 75 million people who receive them. While a smaller COLA means smaller benefit increases next year, it also reflects slower price growth that should ease pressure on retirees' budgets. The official 2027 COLA will be calculated from the average of the CPI-W readings for July, August and September — the third quarter of the year. The BLS is expected to release the first of those readings on Aug. 12. ## Why the 2027 COLA forecast just changed The consumer price index (CPI) [report](https://www.bls.gov/news.release/cpi.nr0.htm) for June, released by the Bureau of Labor Statistics, or BLS, showed an annual inflation rate of 3.5%, down from 4.2% a month earlier. The CPI is the most-watched inflation measure, but the Social Security Administration uses a slightly different inflation metric to calculate the COLA — the consumer price index for urban wage earners and clerical workers, or [CPI-W](https://money.com/social-security-cola-cpi-e/). As with the CPI, inflation as measured by the CPI-W was also 3.5% in June, down from 4.4% in May. "This is a significant drop in inflation, and one that we've rarely seen in the June CPI data over the past five years," Johnson said in a news release Tuesday. ## Gas prices could push the 2027 COLA higher The CPI-W includes energy costs, which have been volatile this year. Gas prices have fallen by about 70 cents per gallon since their peak in May, according to [AAA](https://gasprices.aaa.com/gas-prices-reverse-course-and-start-rising-again/). So far in July, gas prices have been rising again, with the national average increasing about 7 cents in the past week, according to AAA. The rebound in oil and gas prices comes as the U.S. and Iran have continued to carry out strikes. "With ongoing tensions with Iran in the Strait of Hormuz affecting oil prices, it is unclear whether this drop in inflation will be sustained," Johnson wrote. The Senior Citizens League, an advocacy group that also issues monthly COLA forecasts, said in a [release](https://seniorsleague.org/this-years-cola-projection-holds-at-3-8/) Tuesday that its 3.8% estimate remains unchanged from the prior month. The two separate estimates, now closely aligned, had diverged by nearly a full percentage point as of last month — perhaps because Johnson's modeling did not anticipate the steep drop in gasoline prices. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/2027-social-security-cola/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Social Security", "item": "https://money.com/social-security/" }, { "@type": "ListItem", "position": 4, "name": "Social Security COLA Estimate Drops After Inflation Cools" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/2027-social-security-cola/#webpage", "url": "https://money.com/2027-social-security-cola/", "name": "Social Security COLA Estimate Drops After Inflation Cools", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-07-15T14:10:39.000Z", "mainEntity": { "@id": "https://money.com/2027-social-security-cola/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/2027-social-security-cola/#breadcrumb" }, "dateModified": "2026-07-15T14:10:39.000Z" }, { "@type": "NewsArticle", "headline": "Social Security COLA Estimate Drops After Inflation Cools", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/07/News-Inflation-cola.jpg", "width": 2880, "height": 1920, "caption": "News-Inflation-cola" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!)\r\n\r\nKatherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others.\r\n\r\nKatherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. 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