"Social Security retirees got a 2.8% Cost of Living Adjustment (COLA) this year, and retirees have now received their first bigger checks of the new year. For many, the 2.8% benefits bump may feel too small to have made a difference in their spending power - especially given that Medicare premiums increased in 2026 as well. That meant most retirees who pay Medicare premiums from their Social Security check saw $17.90 of their COLA taken away due to these added medical care costs."
"Based on early estimates from the Senior Citizens League, it's looking like the 2027 COLA is on track to be even smaller next year than it was this year. The Senior Citizens League bases its assessment on each year's COLA on data from the Bureau of Labor Statistics. The Bureau publishes consumer price indexes, including CPI-W, which is a price index that tracks the spending power of urban wage earners and clerical workers. It's used to determine how much the COLA should be each year."
"The January BLS data on the consumer price index is out now, and it shows that in December, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) demonstrated a 2.6% year-over-year increase. While this data will not be included in the official COLA calculation, it's still helpful in understanding patterns that will affect the Cost of Living Adjustment, as the official COLA is calculated based on average changes to CPI-W during the third quarter of the year."
Social Security beneficiaries received a 2.8% COLA in 2026 and saw larger checks this year. Medicare premium increases in 2026 reduced most retirees' effective COLA by $17.90 when premiums are deducted from Social Security. Early estimates indicate the 2027 COLA may be smaller than the 2026 increase. Those estimates rely on Bureau of Labor Statistics CPI-W data, which tracks prices faced by urban wage earners and clerical workers. January CPI-W showed a 2.6% year-over-year increase in December, though the official COLA relies on average CPI-W changes during the third quarter.
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