Social Security beneficiaries could see a 2.7% cost-of-living adjustment (COLA) next year, which is slightly more than the 2.5% boost U.S. retirees received this year.

The new estimate comes from the Senior Citizens League, an advocacy group, which posted its prediction on its website on Tuesday after the Bureau of Labor Statistics released its latest inflation figures.

AARP also released 2026 COLA estimates from experts, such as Mike Lynch, managing director of applied insights at Hartford Funds, who predicted a more modest adjustment in line with the 2025 COLA.

The Social Security Administration makes a cost-of-living adjustment each year to ensure benefits payments for U.S. seniors keep pace with inflation. The yearly adjustment, which the agency is scheduled to announce in October, would go into effect in January 2026.

The SSA did not immediately respond to CBS MoneyWatch's request for comment.

Each fall, the agency uses inflation data from July, August and September to determine the COLA for the next year. The consumer price index (CPI), a basket of goods and services typically bought by consumers that tracks the change in prices on everyday items over time, showed that the inflation rate in July held steady at 2.7% on an annual basis, the same as it was in June.

The inflation rate has remained at or below 3% since the start of 2025. However, experts predict it could inch up later in the year as tariffs put more pressure on consumer prices. Alan Detmeister, an economist at UBS, told CBS MoneyWatch that he estimates headline CPI will rise to 3.7% and core CPI will rise to 3.8% by the second quarter of 2026.

Teresa Ghilarducci, a labor economist at New York City's New School, believes inflation will likely rise and is concerned that a moderate cost-of-living adjustment "probably won't be enough to cover the inflation rates that we're headed into," AARP reported.

Martha Shedden, the president and co-founder of the National Association of Registered Social Security Analysts, echoed that concern, telling CBS MoneyWatch that based on the current way COLA is calculated, the increase is "not keeping up with seniors' true expenses."

According the the AARP, the 2.5% COLA adjustment introduced this year boosted the average Social Security retiree's payment by about $49 a month. The average monthly Social Security check for all beneficiaries was $1,861 in June 2025 and $2,005 for retired workers, according to the Senior Citizens League.

In addition to the COLA, some senior citizens will also benefit from a provision included in President Trump's "big, beautiful bill" which provides a temporary tax deduction of up to $6,000 for Americans aged 65 and older.

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