Retirement Social Security

Why Social Security COLA Estimates Keep Changing

Energy costs and more are behind conflicting COLA estimates.

By Paige Cerulli , Edited by Andrea Basse

Updated May 16, 2026

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If Social Security payments are part of your retirement plan, you may be following the news about the predicted 2027 Social Security COLA. It seems like different numbers are released every week, so keeping up with the latest information may be confusing. Analysts have issued multiple revised projections for the 2027 COLA in just the past few months, and nothing is definite yet.

Here's what to know about the 2027 COLA, why the numbers keep changing, and when to expect some final answers.

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What is the Social Security COLA

The cost-of-living adjustment (COLA) is a calculation that adjusts Social Security benefits and helps them keep up with inflation. If inflation increases, the COLA may increase to help Social Security beneficiaries cover their increased living costs. If inflation doesn't increase, a COLA isn't implemented and Social Security benefits remain at the same rate, which happened in 2016.

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How the COLA is calculated

The Social Security Act outlines a specific formula that is used to calculate the COLA each year. The calculation is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by the U.S. Bureau of Labor Statistics (BLS).

The COLA is calculated based on the percentage by which inflation increases during the third quarter of the previous year. In other words, the 2027 COLA is based on CPI-W data from July, August, and September of 2026.

Estimated projections for the 2027 COLA

Since the inflation data used to calculate the 2027 COLA is not yet available, analysts are making and quickly adjusting their COLA predictions based on current economic factors. Those estimated projections have fluctuated wildly.

Such calculations are based on inflation fluctuations occurring early in the year, so they are not final and don't reflect the data that is ultimately used to calculate the COLA.

The COLA estimates have gone on a wild swing because they're being driven by several fluctuating factors.

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Energy price spikes

Energy and fuel prices affect inflation rates, and the Iran conflict sent energy prices surging in March. In fact, CRI-W inflation had measured 2.2% in January and February, then rose to 3.3% in March. In April, it reached 3.8%, driven by increased energy and fuel costs. Rising food prices, which may also be impacted by fuel costs, also contributed to the inflation surge.

Tariff-driven goods inflation

Trump's tariffs contributed to inflated prices on goods, which increased the overall inflation data. According to an analysis by The Budget Lab, imported core goods and durable goods prices rose by 1.5% during 2025 through January 2026.

In March 2026, the Joint Economic Committee released data predicting that if the tariff revenue remains at the same level recorded in January 2026 for the rest of the year, an American family is projected to pay more than an average of $2,500 in tariffs.

Cooling inflation data

Inflation data cooled more than anticipated in May 2026, prompting the Federal Reserve to maintain its benchmark interest rate, rather than making any adjustments. The May data contrasts with the rapidly rising inflation seen earlier this year, and it may result in lower COLA estimates.

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Different analyst methodologies and timing

Even the individuals and groups predicting COLA, and when they make those predictions, may result in different estimates. The Senior Citizens League and analyst Mary Johnson of Johnson Advisor & Research are two frequently cited sources for early COLA projections. Most recently, The Senior Citizens League estimated the 2027 COLA to be 3.9%, while Johnson projected a 4.2% COLA.

Analysts may have their own methodologies leading to different calculations, and the data they use to make those calculations may also vary. That's why it's helpful to consider multiple projections and to remember that these projections are just estimates that could frequently change. That's also why you could see so many varying estimates coming from different outlets.

Bottom line

The Social Security Administration typically releases the official COLA in October of each year, and no inflation data prior to July is incorporated into that calculation. For now, every estimate is just a forecast based on what's been happening earlier in the year. The projections may be useful for planning and estimating what's to come in 2027, but they may also change with every monthly inflation report that's released until October.

If you're worried about the effects of inflation on your retirement planning, consider speaking with a financial advisor. A skilled advisor may be able to review your retirement plan, provide advice, and help you set yourself up for retirement.

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