2027 Social Security COLA Forecast Reveals Tinier Increases — How To Prepare

Core Insights - The Social Security cost-of-living adjustment (COLA) for this year is 2.8%, resulting in an average increase of $56 per month for beneficiaries [2] - Predictions indicate that the COLA for 2027 may decrease to 2.5% due to slowing inflation, which could impact retirees' financial planning [2][3] Summary by Category Social Security Benefits - The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which may not accurately reflect the inflation experienced by retirees [3] - Housing and healthcare costs, which retirees spend a larger portion of their income on, typically rise faster than the overall inflation rate [4] Financial Planning for Retirees - To mitigate the impact of a potentially smaller COLA in 2027, retirees are advised to increase their income, eliminate unnecessary expenses, and make small adjustments in spending [5] - Comparison shopping for mandatory expenses and taking advantage of senior discounts can lead to significant savings [5] - Building an emergency fund and setting aside savings specifically for Medicare premiums can help offset the effects of rising costs [5]