2027 COLA Could Hit 3.9%— Why Seniors Are Still Falling Behind as Housing Costs Explode

Inflationary pressure could mean one of the biggest boosts to Social Security benefits in nearly five years, but as essential housing costs outpace inflation, the bump could still fall short of many seniors' needs. 

A new estimate from The Senior Citizens League (TSCL) projects that the Social Security cost-of-living adjustment, or COLA, could reach 3.9% in 2027—up sharply from the 2.8% increase beneficiaries received in 2026 and potentially the largest adjustment since the 8.7% boost to 2023 benefits.

For the average retired worker, that would raise the typical benefit from $2,071 to roughly $2,152—an increase of about $81 per month. It’s a meaningful increase from earlier projections that suggested the 2027 COLA would hold steady at 2.8%, adding just $58 per month.

But the larger check isn’t exactly good news, as it reflects the growing affordability pressures hitting seniors particularly hard, according to TSCL Executive Director Shannon Benton.

“Many seniors are telling us the same thing: As inflation picks back up, life still does not feel affordable,” Benton said via statement. “The average senior already lives on much less than younger Americans, according to the Census Bureau, and our supporters constantly tell us they feel like they’re falling farther and farther behind.”

Nowhere is that strain more obvious than in the housing market, as seniors on fixed incomes fight growing tax, insurance, and utility burdens—all of which rose faster than inflation and the COLA adjustment in 2025 and threaten to do the same this year.

How rising prices are hitting housing hard

Even seniors who own their homes outright still face a growing list of costs that can absorb, or even outpace, their Social Security increases.

Property taxes are one such example. Across the U.S., the average homeowner paid $4,427 in property taxes last year, up 3% from 2024, according to a new analysis from real estate data firm ATTOM. That increase alone outpaced the 2.8% COLA beneficiaries received in 2025.

Insurance is another growing pressure point. The average homeowners insurance premium is expected to rise 4% in 2026, after jumping 12% in 2025, according to Insurify—again outpacing recent Social Security adjustments.

Utilities are moving in the same direction, too. Electricity prices rose 6.7% in 2025, per the BLS, while natural gas posted a 10.8% jump, both well above the broader inflation rate and recent COLA increases.

Those national figures tell a troubling story, even while masking larger regional variations. In some parts of the country, residential electric bills have risen much faster—like in West Virginia, where the average price of electricity for residential ratepayers has risen by nearly 34% since 2019.

It’s a clear illustration of how even bigger checks can still feel like a pay cut, and why some senior advocates are calling for a radical rethinking of how Social Security benefits are calculated.

Why COLAs can miss seniors' real costs 

COLAs are designed to help Social Security benefits catch up after prices rise. But that catch-up mechanism has limits, because of what the preferred measures for inflation capture and miss.

The Consumer Price Index (CPI-U) rose 3.8% from a year earlier in April, up from a 3.3% reading in March, according to the Bureau of Labor Statistics. Energy prices accounted for about 40% of the month-over-month increase, as the war in Iran pushed these costs up almost 18% year over year. Food prices were also a factor, climbing 3.2% year over year.

It's a remarkable level of nuance, to be sure. But these headline numbers don’t measure inflation through a retiree’s budget, according to Benton’s organization.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)—a narrower cut of the CPI-U that COLA is pegged to—tracks urban wage earners and clerical workers, meaning it can underweight costs that often take up a larger share of older Americans’ income, especially medical care and housing.

That’s why TLSC has advocated for indexing the COLA to the Research Consumer Price Index for Americans age 62 and older, or R-CPI-E—an experimental BLS index that weights these categories more in line with older Americans’ spending patterns.

While a broad look at the index shows overall CPI, CPI-E, and COLA adjustments trend largely in lockstep, a closer look at the last five years shows sharp divergence starting in 2022, when the COLA dropped below both CPI and the CPI-E, only regaining ground in 2025.

The most recent release from the R-CPI-E offers an even starker look. In April, overall costs for Americans 62 and older were up 3.8% from a year earlier—roughly in line with the broader CPI-U reading. But two of the categories that matter most to retirees charged even further ahead as housing costs rose 3.9%, and transportation jumped 6.8%.

That's to say nothing of medical care costs, which have long outpaced all other categories of spending.

“For retirees living on fixed incomes, the costs that matter most, especially healthcare, housing, utilities, and insurance, continue to rise faster than prices in the rest of the economy, silently wrenching seniors dry,” Benton said. “This makes the national affordability conversation even more important than ever.”

TSCL estimates that a senior who filed for Social Security with average benefits 30 years ago would have received nearly $14,000 more in retirement if the CPI-E had been used.

It's a significant claim in today's environment. The 2027 COLA is still preliminary, with the official announcement scheduled for October. But until then, seniors are left with the same uneasy reality: A bigger COLA may be coming, but so are the costs that could quickly eat it up.