With July and August Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data now official, two of the three months that determine the 2027 Cost-of-Living Adjustment (COLA) are locked in. Only the September CPI-W report, due October 14, 2026, remains before the Social Security Administration (SSA) announces the official number — just 27 days away.
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Two-Thirds of the Data Is In
Today’s Consumer Price Index report from the Bureau of Labor Statistics is the second of three reports that will determine the 2027 COLA. The annual adjustment is based on the average CPI-W during July, August, and September, so two of the three months needed for the calculation are now in the books.
The August report showed that:
- CPI-W rose 3.5% over the previous 12 months, up from 3.4% in July.
- Gasoline prices jumped 3.9% for the month and now sit 27.4% higher than a year ago, accounting for more than a third of August’s overall price increase.
- Shelter costs, which make up the largest share of most household budgets, rose a modest 0.3% for the month and are up 3.0% over the past year.
With one month of data left, forecasters are now split on which direction the final number will move.
Where the Major COLA Estimates Stand
Rather than a single projection, retirees are now seeing a real spread of estimates depending on the source and methodology:
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| Source | 2027 COLA Estimate | Change From Last Month |
|---|---|---|
| AARP | 3.6% | Up from 3.5% |
| The Senior Citizens League (TSCL) | 3.5% | Down from 3.6% |
| Mary Johnson (independent analyst) | 3.4% | Down from 3.7% |
| Committee for a Responsible Federal Budget (CRFB) | 3.2% | Roughly steady |
TSCL, which updates its forecast monthly, has now published three consecutive estimates: 3.8% in June, 3.6% in July, and 3.5% in August. If TSCL’s projection took effect today, the average Social Security benefit would rise by $67.90, from $1,940.08 to $2,007.98.
AARP moved the opposite direction, raising its estimate to 3.6% after the August report, citing continued strength in energy prices. AARP’s model layers in inflation projections from the Federal Reserve Bank of Cleveland for the two months that haven’t been reported yet, which helps explain why its number can move differently than TSCL’s from month to month.
Independent analyst Mary Johnson, a longtime Social Security researcher, has trimmed her estimate and now projects 3.4%. CRFB, a fiscal watchdog group, remains the most conservative estimate at 3.2%.
TSCL Executive Director Shannon Benton has noted that seniors will likely feel disappointed by the final number regardless of where it lands, since the CPI-W measures the spending habits of working-age wage earners rather than retirees, who tend to spend more heavily on housing and health care.
What’s Driving This Summer’s Inflation Numbers
For readers who want the plain-English version of what’s pushing prices up (and what isn’t):
- Gasoline and energy are the biggest factor. Gas prices are up nearly 28% over the past year, and energy overall is up more than 16%. This is the single largest driver of the COLA estimate.
- Housing costs continue to climb steadily but not sharply — shelter is up 3.0% over the past year, a similar pace to recent months.
- Food prices are essentially flat month to month, up 2.7% over the past year, with grocery prices rising a bit faster than restaurant prices in some categories and falling in others (fresh produce prices, for example, have declined recently).
- Medical care and vehicle insurance actually declined slightly in August, a rare bit of relief in categories that have weighed on household budgets for years.
The takeaway for retirees: this year’s COLA estimate is being pushed higher almost entirely by gas and energy prices, not by the categories — housing and health care — that make up the bulk of most retirees’ actual spending.
Why CSRS and FERS Retirees Receive Different COLAs
One of the most misunderstood aspects of federal retirement is that CSRS and FERS retirees do not always receive the same annual adjustment.
Federal law limits FERS COLAs whenever inflation exceeds 2%. If the Social Security COLA is above 3%, the FERS COLA is reduced by one percentage point. If the official Social Security COLA ultimately equals 3.5%, the FERS calculation would be: 3.5% − 1.0% = 2.5%. This one-percentage-point difference may appear small, but over a retirement spanning 20 to 30 years it can meaningfully reduce purchasing power. A full breakdown of how the FERS COLA rule works is available in the Guide to Federal Retiree COLAs.
The One Variable Left: September Energy Prices
One inflation report remains before the 2027 COLA becomes official. Energy prices are the biggest wild card heading into September: diesel prices have recently climbed to record highs, and since diesel powers the trucks and railroads that move goods across the country, sustained increases there tend to work their way into prices broadly. If that trend continues into the September CPI-W report, the final COLA could land closer to AARP’s 3.6% estimate than TSCL’s 3.5%. If energy prices ease instead, the number could drift toward the lower end of the current range.
What Federal Retirees Should Watch Next
The official COLA is now just 27 days away. Federal retirees should keep an eye on:
- September CPI-W data, released alongside the official COLA announcement
- Energy and gasoline prices through the rest of September, the single biggest swing factor left
The SSA is expected to announce the official 2027 COLA on October 14, 2026. For now, retirees remain on track for one of the larger COLAs in recent years, well above the 2.8% increase that took effect in 2026.