Here’s a headline that sounds like great news: Your Social Security check could jump 4.7% next year.
That’d be the biggest raise retirees have seen since the inflation spike a few years back. Sounds wonderful — until you understand why it’s happening.
I’ve been writing about money since 1991, and I’ve learned one thing about cost-of-living adjustments (COLAs). A fat one is rarely a gift.
It’s usually a symptom. Proof that the cost of living just clobbered you, and the government’s scrambling to catch up.
So before you spend that raise, let’s talk about what’s really going on.
1. The projection just jumped again — and 4.7% is the high end
On June 10, the Bureau of Labor Statistics dropped fresh inflation data, and the forecasters pounced.
The Senior Citizens League now pegs the 2027 COLA at 3.8%. Just two months ago, they were calling for 3.3%. Mary Johnson — who forecast these adjustments at The Senior Citizens League for some 30 years before going independent — goes further, predicting 4.7%.
Either way, it’s a big leap from this year’s 2.8% bump, though still a long way from the double-digit COLAs of the early 1980s.
If the 3.8% holds, the average retiree’s check climbs about $77 a month, from $2,026 to $2,103.
But here’s the catch: None of it’s locked in. The official number won’t land until October.
2. A bigger raise means inflation is winning
Why are the estimates climbing? Because prices are.
Inflation hit 4.2% in May — the hottest reading since April 2023. That’s a three-year high. Gas prices alone surged more than 40% over the past year, and airfares jumped nearly 27%.
So yes, your COLA is probably going up. But only because your grocery bill, your gas tank, and your plane ticket got there first.
A COLA doesn’t put you ahead. In a good year, it barely keeps you even.
3. The whole thing rests on gas prices — which are already falling
Here’s where it gets shaky.
That scary 4.2% figure is driven almost entirely by energy. Strip out volatile gas and food, and “core” inflation was a much calmer 2.9%.
And gas? It’s already retreating. Average prices have dropped more than 40 cents a gallon since peaking in May.
The COLA math only uses inflation from July, August, and September. If pump prices keep sliding this summer, that 4.7% dream could shrink back toward earth by fall.
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4. Medicare’s going to take its cut first
Let’s say the big raise actually happens. Don’t spend it yet.
For most retirees, Medicare Part B premiums get yanked straight out of the Social Security check before the money ever hits the bank. And those premiums have a nasty habit of rising faster than the COLA itself.
The 2027 premium hasn’t been announced. But if history’s any guide, a chunk of your “raise” is already spoken for.
It’s the oldest trick around: Give with one hand, take with the other.
5. Even a fat raise won’t fix the real problem
Here’s the part nobody promising bigger checks wants to mention.
In early June, a government report warned that Social Security’s trust funds could run dry as soon as 2032. If Congress does nothing, benefits could be slashed roughly 24%.
Think about that. A 4.7% raise in 2027 means little if a 24% cut is waiting down the road.
Treasury Secretary Scott Bessent has pledged benefits will stay intact. I’ve heard a lot of promises in 35 years of covering this stuff. I’ll believe this one when I see it.
So should you root for a 4.7% COLA? Sure. More money beats less money every time.
Just don’t mistake it for a win. A big raise means inflation already picked your pocket, Medicare’s about to grab its share, and the bigger threat to your benefits is still sitting in Congress’ inbox.
The COLA isn’t your financial plan. It never was.
The retirees who sleep well aren’t the ones waiting on a government raise. They’re the ones who built income they control.
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