Social Security COLA 2027 estimate: 75 million Americans could see 3.6% higher benefits

Nearly 75 million Americans could get another boost in Social Security benefits in 2027, as inflation continues to shape the annual cost-of-living adjustment, or COLA. The possible increase could become the second straight “Trump Bump” for Social Security recipients, with inflation linked to President Donald Trump’s policies playing a role in the size of the benefit increase.Social Security could get a 3.5% to 3.6% COLA in 2027, giving retirees a second “Trump Bump” as inflation keeps benefit increases elevated. (Photo by Jim WATSON / AFP) (AFP)Social Security’s annual COLA is designed to help Americans keep up with rising costs of essentials such as food, housing and healthcare. The Trump connection comes mainly from inflation. Trump’s tariff policies pushed prices higher in 2025, which contributed to the inflation used to calculate the 2026 COLA.2027 Social Security COLA estimateFresh tariffs are now adding to inflation pressure heading into the 2027 COLA calculation. Inflation linked to the conflict with Iran, especially higher energy prices, is also keeping prices elevated. Social Security and Supplemental Security Income, or SSI, benefits increased by 2.8% in 2026, affecting about 75 million Americans, according to Moneywise.The 2026 increase gave the average retired worker about $56 more per month, with the higher payments starting in January. A potentially bigger increase could be coming in 2027. The Senior Citizens League (TSCL) currently estimates that the 2027 COLA could be 3.6%. AARP has a slightly lower estimate. It currently expects a 3.5% increase in Social Security benefits for 2027. AARP said the average retired worker received about $2,086 per month in July 2026.How much Social Security could riseIf the COLA comes in at 3.5%, that average monthly benefit would rise by about $73. That would push the average monthly Social Security payment to roughly $2,159. Over a full year, a 3.5% increase would mean about $876 more in Social Security benefits for the average retired worker. However, the final 2027 COLA has not been decided yet.How Social Security COLA is calculatedSocial Security’s COLA is based on inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The government compares the average CPI-W readings from July, August and September with the average readings from the same three months of the previous year. Only the July inflation data is available so far. This means the August and September numbers could still push the 2027 COLA estimate higher or lower.Also read: US inflation rises to 3.7% in July: What it means for Fed rate cutsWhen 2027 COLA will be announcedThe Social Security Administration is expected to announce the official 2027 COLA in October. The potential increase is important not only because of its size but also because of the longer trend it could create.If the COLA is 3.5% or 3.6%, Social Security benefits would rise by at least 2.5% for the sixth year in a row. That would create a streak not seen in roughly three decades, making the 2027 increase potentially historic. Recent inflation data explains why the COLA estimates remain relatively high.The CPI-W rose 3.4% in July from a year earlier, according to the Bureau of Labor Statistics. Energy prices were a major part of that increase. Energy prices rose 14.7% year over year in July, according to the Bureau of Labor Statistics. Gasoline prices increased even more sharply, rising 24.6% over the same period, according to the Bureau of Labor Statistics.Bigger check does not mean more moneyHigher inflation can result in a larger Social Security check because the COLA is meant to help beneficiaries deal with rising prices. But a bigger Social Security payment does not automatically mean retirees have more buying power. The main purpose of the COLA is to help benefits keep pace with inflation. It is not designed to make retirees financially better off than they were before prices increased.This is especially important for retirees who depend heavily on Social Security for their daily expenses. According to a 2026 TSCL survey, 44% of US retirees said they rely only on Social Security for their income. For these retirees, rising prices can continue to put pressure on their budgets even when Social Security payments increase.Gold as an inflation hedgeThe possible 2027 “Trump Bump” therefore has two sides: retirees could receive a larger check, but the same inflation driving the increase could also make everyday goods and services more expensive. One way retirees may try to protect their money from inflation is by looking at assets outside Social Security and traditional savings.Gold is often viewed as a way to preserve purchasing power because its supply is limited and it cannot simply be created by central banks like fiat currency. Gold is also considered a safe-haven asset during periods of economic and geopolitical uncertainty. The conflict involving Iran, concerns about global energy supplies and uncertainty over tariffs have increased interest in assets that are not directly linked to corporate earnings or government-issued currencies.One option mentioned by Moneywise is a gold IRA, which allows investors to hold physical gold or gold-related assets inside a retirement account. A gold IRA combines the tax features of an IRA with exposure to gold. However, retirees should consider fees, risks and their overall financial situation before choosing such an investment.Also read: Mortgage rates today: 6.35% ARM vs 6.57% fixed mortgage — which home loan is better?Gold IRA option for retireesMoneywise highlights Goldco as one company offering gold IRA services. Goldco says its minimum purchase is $10,000 and that it offers free shipping and retirement resources. Goldco also advertises a match of up to 10% of qualifying purchases in free silver. Investors should review the terms and conditions before making any investment decision.Real estate for retirement incomeAnother way retirees can look for additional income is through real estate. Property values and rents can rise over time as the cost of labor, materials and housing increases. Rental property can also provide a regular income stream that could supplement Social Security. But owning a rental property can be difficult during retirement. Buying a property requires a large amount of money upfront, while maintenance, vacancies and tenant problems can create extra work.Moneywise points to platforms such as Arrived, which allow people to buy shares of rental homes instead of purchasing an entire property. Arrived says investors can start with as little as $100 and potentially receive rental income distributions from their investment. The platform allows investors to browse selected properties, choose a property and decide how many shares they want to buy.Arrived is backed by investors including Jeff Bezos. Arrived is also offering a limited-time promotion in which eligible users who open an account and add at least $1,000 can receive a 1% account match, according to Moneywise. Still, real estate investments carry risks, and returns are not guaranteed. Investors should understand the fees, property risks and terms before investing.Financial advisor for retirement planningRetirees may also consider working with a financial advisor, especially if they have a larger investment portfolio. Retirement planning can involve several decisions, including how much money to withdraw, how to manage taxes and how to create income that can last through retirement. These decisions can become more complicated as a retiree's savings and investments grow.Moneywise highlights WiserAdvisor as a platform that can connect people with financial advisors. WiserAdvisor says people with portfolios of $250,000 or more can answer questions about their savings, retirement plans and investments and receive matches with up to three advisors. The matched advisors can then be contacted for consultations to help investors decide whether they are a good fit.Retirees can also look for ways to reduce their everyday expenses. AARP offers discounts and other benefits covering areas such as prescriptions, dental plans, travel, entertainment and insurance. AARP also provides information that can help older Americans make decisions about Social Security, Medicare and other government benefits.What the 2027 COLA meansThe bigger takeaway from the possible 2027 COLA is that a larger Social Security check does not necessarily mean retirees are financially ahead. If inflation remains high, the higher payment may simply help cover the rising cost of everyday life. The final 2027 COLA will depend on the remaining August and September CPI-W data, with the official figure expected from the Social Security Administration in October.