Social Security's 2027 COLA Set at 3.6% Based on September Inflation Data
The Social Security Administration has announced a 3.6% cost-of-living adjustment (COLA) for 2027, based on the third-quarter average of the CPI-W inflation metric. This marks an increase from this year's COLA and is among the five largest adjustments in the past 35 years. The rise reflects higher energy prices driven by geopolitical tensions, particularly the closure of the Strait of Hormuz affecting global oil supply. The CPI-W rose to 3.9% year-over-year in September—the second-highest increase this year—due to greater weight given to expenses like rent and transportation compared to the broader CPI-U metric used for general inflation tracking. Despite a brief cooling period in July and August, renewed conflict led to an uptick in prices by late summer. While recipients will see increased benefits starting next January, the adjustment is unlikely to fully offset current high inflation levels. The COLA calculation method involves averaging Q3 CPI-W data compared with the previous year's average before rounding to one-tenth of a percent.
Topics: cost-of-living adjustment (COLA) CPI-W energy prices inflation
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