Social Security recipients could be in line for a larger increase in 2027 — but whether that boost actually improves purchasing power is another question.
AARP currently projects a 3.6% cost-of-living adjustment (COLA) for 2027, based on recent inflation data. If that estimate holds, the average retired worker receiving about $2,086 per month could see an increase of roughly $75 per month beginning in January.
That would be higher than the 2.8% COLA for 2026, but the final number is not set yet. Social Security’s annual adjustment is calculated using changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, during July, August and September. The official 2027 COLA is expected to be announced on October 14 after September inflation data is released.
Why the increase matters
For many retirees, Social Security is one of the few sources of income that automatically adjusts for inflation. Yet rising costs can still outpace those annual increases — particularly in areas such as housing, food, energy and health care.
A recent survey cited by AARP found that 74% of current Social Security beneficiaries have made financial changes because rising costs have outpaced their benefit payments. More than half reported cutting discretionary spending, while 38% said they had reduced spending on essentials such as groceries and medications.
The lesson: inflation protection still matters
A COLA can help retirees maintain purchasing power, but it also highlights the broader challenge of planning for rising expenses over a retirement that may last decades.
For investors, that reinforces the importance of considering how a retirement strategy responds to inflation and changing economic conditions. Diversification across different types of assets — including tangible assets such as physical precious metals — can be one consideration when building a long-term retirement strategy.
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Book a Free Strategy CallAmerican Alternative Assets is a precious-metals dealer and does not provide investment, legal, tax, or retirement advice. Decisions regarding the purchase or sale of precious metals are solely the customer’s responsibility and should be made based on the customer’s own research and judgment. Source: Realtor.com, “10 Million Seniors Live in Poverty—Even as They Hold Trillions in Housing Wealth.”
