The Social Security cost-of-living adjustment (COLA) for 2027 has been set at 3.6 percent, the federal government announced today, but proposals to change how the annual increase is calculated could deliver larger adjustments in future years. The announcement, which will boost benefits by hundreds of dollars for millions of Americans, comes as lawmakers and advocacy groups push for using an inflation measure that better reflects older Americans’ expenses. Research from The Senior Citizens League (TSCL) suggests the change could add thousands of dollars to benefits across a retirement, although the outcome would depend on future inflation.
Two proposals—the Boosting Benefits and COLAs for Seniors Act and the Social Security Expansion Act—would introduce the use of an inflation index for older consumers into the calculation. But it doesn’t fully account for the costs that Social Security beneficiaries face,” Nancy Altman, president of Social Security Works, said following the announcement. It compares the index’s third-quarter average with the third-quarter average in the last year a COLA was determined.
Democratic Representative Nikki Budzinski’s proposed Boosting Benefits and COLAs for Seniors Act, introduced in October 2025, would use either CPI-W or the Consumer Price Index for Elderly Consumers, known as CPI-E, whichever produces the higher adjustment. A companion bill for the Senate was introduced by Democrat Richard Blumenthal. That provision would protect beneficiaries against receiving a smaller increase in a year when CPI-E trails the CPI-W.
The legislation would also require the Bureau of Labor Statistics (BLS) to publish an official older-consumer index, using its existing research version during the transition. Senator Kirstin Gillibrand, a cosponsor of the Senate version, said following today’s COLA announcement that it is “not enough to make up for skyrocketing costs for groceries, gas, heating, and healthcare in President Trump’s America” and said she is fighting to “protect and expand Social Security benefits long-term by changing the formula used to calculate COLAs to better account for the expenses that seniors face.” Independent Senator Bernie Sanders’ Social Security Expansion Act, introduced in February 2025, would replace the existing measure with CPI-E. His proposal is part of a package pushing for benefit increases and additional revenue for the program, including Social Security taxes on earnings above $250,000.
TSCL’s October 2025 analysis estimated that an average person who retired in 1999 would have received nearly $5,000 more across a 25-year retirement had adjustments been calculated using CPI-E. For someone retiring in 2024, it projected just over $12,000 in additional benefits across 25 years, assuming long-term inflation patterns continued. The group used historical adjustments where available and average adjustments for future years, making the figure a modeled estimate rather than a guaranteed gain.
The argument for changing the index rests on differences in household spending, as older Americans tend to devote larger shares of their budgets to medical care and shelter, categories whose prices have historically increased faster than many other expenses. The CPI-W measures the spending of certain workers, rather than the elderly, who are more likely to not work. TSCL’s historical comparison shows that, however, using the CPI-E it would have generated smaller increases for 2019, 2022 and 2023, despite generally delivering higher adjustments over time.
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