There are millions of older Americans who collect Social Security today. And for many of them, those benefits are their primary source of income. That makes Social Security’s annual cost-of-living adjustments, or COLAs, extremely important.
Social Security benefits are eligible for a COLA each year. The purpose of those raises is to help ensure that benefits increase in line with inflation.
The latest 2027 COLA projection estimates next year’s raise at 2.8%, according to the Senior Citizens League. If that’s correct, it would be the same raise seniors got at the start of 2026. But a 2.8% COLA in 2027 is hardly good news.
Seniors on Social Security are struggling
A 2.8% COLA may not seem like a terrible thing for a single year or as a repeat situation. The problem, however, is that many seniors on Social Security are struggling already based on that 2.8% raise. And if next year’s COLA doesn’t come in higher, beneficiaries might have an even harder time keeping up with their costs.
The Senior Citizens League says that based on this year’s COLA, many seniors are already unable to manage their medical expenses. A good 57.6% of seniors have forgone at least one healthcare service or product in the past year to cut costs.
Specifically, seniors are cutting back on dental care, eye exams, and hearing checks. This makes sense, because all three of these are services that are not covered by original Medicare. And a 2.8% COLA may not provide enough income to pay for these expenses out of pocket.
The Senior Citizens League also says that not surprisingly, seniors who depend the most on Social Security COLAs are the most likely to forgo medical care they need.
A higher COLA may not solve the problem
Getting a 2.8% COLA in 2027 might come as a blow to many seniors on Social Security. But even if that raise creeps higher, it still may not do a whole lot of good.
Part of the problem is that Social Security COLAs are calculated based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). But the CPI-W is not an accurate reflection of the costs Social Security recipients face.
This year, for example, the cost of Medicare Part B rose more than three times as much as the Social Security COLA. Medicare premium hikes also outpaced Social Security COLAs in 2024 and 2025.
In fact, healthcare costs in general have been rising at a faster pace than Social Security COLAs. And since seniors tend to spend a lot of their money on healthcare, it’s no wonder they keep falling behind.
For this reason, a more generous Social Security COLA in 2027 or in future years may not solve the problem. A better solution would be to reset the COLA formula using an index that measures costs specific to seniors, with healthcare becoming a heavily weighted factor.
Advocates have actually been pushing for this sort of change for years. Until it happens, though, Social Security COLAs may continue to leave retirees struggling to keep up with their expenses, even during periods when those raises are higher.
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