Retirees Could Get a Much Bigger Social Security Raise in 2027 Due to Inflation

Retirees could receive a much bigger Social Security raise in 2027 due to inflation, with inflation and producer price pressures pushing up household costs. The BLS reported May’s CPI at 4.2% year over year, and the Producer Price Index rising 6.5% excluding energy and food, signaling sustained price pressures. The COLA is legally required to be based on the average inflation rate of the months comprising the third calendar quarter of the prior year, tying adjustments to the Social Security Administration’s process. In years with deflation, no COLA is required. The provision is not cumulative, so benefits rise only when inflation supports a COLA, with the goal of maintaining purchasing power for retirees.