Social Security 2027 COLA expected to rise with higher inflation

The Social Security cost-of-living adjustment for 2027 is estimated to be as high as 4.2% as inflation continues to rise, largely driven by higher energy costs stemming from the Iran war.

Mary Johnson, an independent Social Security and Medicare policy analyst, projected the increase amid surging prices for gasoline, energy, and groceries. The Iran war significantly affected the estimate, as Johnson had previously set the 2027 COLA estimate at 3.2%.

The new forecast is based on April’s consumer price index data released by the Bureau of Labor Statistics on Tuesday.

The broad consumer price index rose 3.8% over the past 12 months, according to the data. This marks the fastest increase since May 2023. The index has been steadily increasing since the United States and Israel attacked Iran in late February.

The war, which has effectively closed the Strait of Hormuz to commercial shipping, caused the energy index to rise 3.8% in