Social Security Cost of Living Adjustment (COLA) Could Rise in 2027: What Retirees Should Be Doing Now
Signet Federal Credit Union® Chief Operations Officer Pam Stokes encourages Western Kentucky retirees to use the latest Social Security COLA forecast as an opportunity to review their complete retirement picture—not simply anticipate a larger check.
Social Security recipients could see a larger cost-of-living adjustment in 2027, but Signet Federal Credit Union® Chief Operations Officer Pam Stokes says retirees should look beyond the headline number and focus on what the potential increase could actually mean for their household budgets.
Current forecasts place the 2027 Social Security cost-of-living adjustment, or COLA, around 3.5% to 3.6%. The Senior Citizens League currently projects a 3.5% increase, while AARP estimates 3.6%. The final figure has not yet been determined. The Social Security Administration is expected to announce the official 2027 COLA on October 14 after September inflation data becomes available.
Source: The Senior Citizens League – 2027 COLA Forecast
Source: AARP – 2027 Social Security COLA Estimate
Source: Social Security Administration – COLA Information
For comparison, Social Security beneficiaries received a 2.8% COLA for 2026. The annual adjustment is designed to help Social Security benefits keep pace with inflation and is calculated using changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
While a larger adjustment could provide some additional breathing room for retirees, Stokes says the percentage itself should not be the only number consumers are watching.
“When people hear that Social Security benefits may increase, it can sound like they’re simply getting more money. But a COLA exists because the cost of living has increased, too. For retirees, this is a good time to look at the entire household budget and ask whether their income is keeping pace with what they’re actually spending.”
Turn a COLA Increase Into a Financial Checkup
Rather than waiting for the first 2027 Social Security payment to arrive, Stokes recommends retirees begin reviewing their finances now.
Start by looking at essential monthly expenses, including housing, utilities, groceries, insurance, transportation and health-related costs. Compare what those expenses cost today with what they cost a year ago.
Then look at income beyond Social Security. Retirement savings, pensions, IRAs and other sources of income can all play a role in the bigger financial picture.
“Retirement planning doesn’t end the day you retire,” Stokes said. “Your expenses change. The economy changes. Your priorities change. Reviewing your finances regularly can help you make informed decisions instead of reacting after something changes.”
A projected COLA increase may help offset some rising costs, but it does not necessarily translate into the same increase in a retiree’s available spending money.
Source: AARP – Social Security COLA 2027: An Early Look
Pam’s Advice: Know Where Your Money Is Going
Stokes recommends retirees use the coming months to answer a few important questions:
Has your monthly spending increased over the past year?
Do you have savings available for an unexpected expense?
Are you relying primarily on Social Security, or do you have multiple sources of retirement income?
Have you reviewed your IRA or other retirement accounts recently?
Are there expenses or subscriptions that no longer make sense for your current lifestyle?
Do you understand how Social Security fits into your overall retirement income?
The goal isn’t to make drastic changes based on a forecast. Instead, it is to understand your financial position before the official COLA is announced.
“Sometimes the most valuable financial step is simply sitting down and looking at the numbers,” Stokes said. “Knowing what is coming in, what is going out and what resources you have available can give you a much clearer picture of where you stand.”
Want to Dig Deeper? Start With Free Financial Education
Signet members and the Western Kentucky community have access to an extensive library of free financial education through Banzai, including resources specifically designed around retirement, Social Security, saving and navigating financial changes.
The Signet Banzai Retirement Center brings retirement education together in one place, with articles, interactive tools and calculators covering topics ranging from Social Security and retirement savings to inflation and transitioning into retirement.
For a deeper dive, explore:
How Much Should I Save for Retirement?
Explore how retirement expenses and savings goals can change over time and learn more about preparing financially for retirement.
Understanding Social Security Basics
Learn how Social Security works, how benefits are calculated, when benefits can begin and other important considerations.
Individual Retirement Accounts
Explore Traditional and Roth IRAs, contributions, eligibility, withdrawals and the role an IRA can play in retirement planning.
Retiring in a Rocky Market? Here’s What You Can Do Now
Learn about some of the financial decisions consumers may face when retirement coincides with uncertain economic or market conditions.
Disability Benefits & Insurance
Learn more about disability benefits and insurance and how unexpected changes to income can affect long-term financial planning.
Have Questions About Your IRA? Talk With Brenda Spees.
Online education is a great place to start, but sometimes financial questions are easier to work through with a real person.
Signet members who have questions about Individual Retirement Accounts can make an appointment with Brenda Spees, Signet’s IRA Specialist, to discuss available IRA options, ask questions and better understand how IRAs can fit into their retirement savings plans. Simply give us a call at 270-443-5261 to make an appointment.
Stokes says the important thing is not to wait for a major financial event to start asking questions.
“You don’t have to know every answer before you walk through our doors. That’s what we’re here for. Whether retirement is years away or you’re already living it, education and conversations can help you better understand your options and make decisions that fit your life.”
The official 2027 Social Security COLA is expected to be announced in October. Until then, forecasts remain estimates—and Stokes says that makes now an ideal time to focus on something retirees can control: understanding their own financial picture.
Start with knowledge. Start with a conversation. Start with Signet.
This article is for educational purposes only and is not intended to provide tax, legal or investment advice. Social Security benefit amounts and cost-of-living adjustments are determined by the Social Security Administration. Consult the appropriate qualified professional regarding your individual circumstances.
Federally Insured by NCUA.