Why Early COLA Estimates Are Unreliable -- and What Retirees Should Do Instead
Written by Maurie Backman for The Motley Fool -> Social Security benefits are eligible for a cost-of-living adjustment (COLA) every year. Those increases are based on third-quarter inflation changes. Rather than banking on current COLA projections, you're better off taking ste
Social Security benefits are eligible for a cost-of-living adjustment (COLA) every year.
Those increases are based on third-quarter inflation changes.
Rather than banking on current COLA projections, you're better off taking steps to boost your retirement income yourself.
If you're collecting Social Security and have been for a while, you should be aware that your monthly benefits can change from one year to the next. That's because Social Security benefits are eligible for an annual cost-of-living adjustment , or COLA.
COLAs are meant to help seniors on Social Security keep up with inflation. Many retirees collect Social Security for decades. Without a system to adjust those monthly checks to account for higher costs, retirees would be pretty much guaranteed to lose buying power.
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Meanwhile, even though we're not even at the midway point of 2026, there's already an estimate of what 2027's Social Security COLA might be. But you may not want to get too caught up in that number.
In mid-May, The Senior Citizens League, an advocacy group, said it expects Social Security's 2027 COLA to amount to 3.9% -- a notable increase from the 2.8% raise seniors got earlier this year. That announcement came in the wake of a huge uptick in inflation in April.
