In a major update for senior citizens dependent on Social Security payments, the COLA rates for 2027 are projected to be even less than those for 2025. Senior Citizens League, a nationwide advocacy group for the elderly, predicts COLA increase to be 2.5% in 2027 based on early inflation data, which is 0.3% lower that 2.8% increase seen in 2026.
The projection comes amid concerns for many senior citizens, as rising Medicaid and Medicare premiums in 2026 have already added a significant financial burden on seniors in the US. But it is also important to note that the figures released by the Senior Citizens League are based on early inflation data. Actual COLA rates will be fixed based on the inflation rates between July and September 2026.
The possibly reduced COLA rates continue a trend seen in the last five years, where COLA rates have fallen significantly since the high-inflation days of the COVID-19 pandemic. Though inflation has slowed down in the last four years, the financial burden on the elderly continues to rise.
How A Drop In Social Security COLA In 2027 May Affect Seniors
Despite lower inflation in the last two years, seniors have continued to struggle with finances, and the below 3% COLA increase in the last two years has not practically improved the situation.
Research conducted by the Senior Citizens League found that seniors spend the most on healthcare, which has seen rising costs over the years. As a result, the report notes, the purchasing power of the senior citizens has fallen by over 30% since 2000, which is higher than that of the other age groups.
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Increased Medicare Costs Is Not Helping The Situation
In 2026, the standard Medicare Part B premium increased to about $202.90 per month, while the Part B deductible rose to $283. Medicare Part A’s inpatient hospital deductible also increased to roughly $1,736 per benefit period, along with higher voluntary Part A premiums for those without sufficient work credits.
This has led to an added burden for senior citizens, resulting in higher out-of-pocket expenses for healthcare and lower savings. Initiatives like TrumpRx that promise cheaper drugs are expected to alleviate the situation, but their exact impact is unclear.
The Senior Citizens League argues that a separate index, such as the Consumer Price Index for the Elderly (CPI-E) be used to calculate COLA increase.