People shop for groceries at a Wegman’s store in Brooklyn on July 13, 2026 in New York City.
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As inflation begins to cool, experts are lowering their expectations for the 2027 Social Security cost-of-living adjustment (COLA), with new projections suggesting an increase between 3.7% and 3.8%.
Mary Johnson, an independent analyst specializing in Social Security and Medicare, estimates the 2027 COLA could land at 3.7%. This represents a significant 1% drop from her previous estimate of 4.7% issued last month.
“This represents a substantial decline in inflation, a trend rarely observed in June CPI data over the last five years,” Johnson stated.
Recent government data released Tuesday indicates that the consumer price index rose 3.5% over the 12-month period ending in June. This figure fell short of previous expectations, primarily driven by declining energy prices.
Simultaneously, the nonpartisan Senior Citizens League projects a 3.8% COLA for 2027, maintaining its projection from the previous month.
These forecasts remain subject to change. The Social Security Administration typically announces the official COLA for the following year every October.
Social Security benefits are adjusted annually via cost-of-living adjustments to ensure monthly payments maintain their purchasing power against inflation.
According to the Social Security Administration, the annual COLA has averaged 3.1% over the last decade. In 2026, more than 75 million Social Security and Supplemental Security Income beneficiaries received a 2.8% benefit increase.
Anticipated Changes to Medicare Premiums in 2027
Retiree confidence has seen a decline, according to a January survey conducted by the Employee Benefit Research Institute and Greenwald Research.
The survey, which included 1,045 retirees, found that confidence dropped 5 percentage points to 73%. Primary concerns cited by respondents included inflation, national debt, rising healthcare costs, housing expenses, and potential systemic changes to retirement structures. Notably, 40% of retirees reported that healthcare costs have exceeded their expectations.
Regarding healthcare costs, the annual Medicare trustees report released in June suggests that standard premiums for Medicare Part B—which covers medically necessary and preventive services—may rise to $209.50 per month in 2027. This is a $6.60 increase, or 3.3%, over the 2026 rate of $202.90. Higher-income beneficiaries may be subject to additional surcharges.
“That’s relatively low,” Johnson noted, adding that the average annual increase for Part B has been approximately 5.4% over the last decade.
The initial deductible for Medicare Part D, which covers prescription drugs, is set to rise to $700 in 2027, up from $615 in 2026, according to the trustees report. Additionally, the out-of-pocket spending limit, or catastrophic threshold, will increase to $2,400, up from $2,100 in 2026.
