The US Social Security Administration is expected to announce the 2027 cost-of-living adjustment (COLA) after the September inflation report is released on October 14. The US Bureau of Labor Statistics will publish the report at 8:30 am ET, providing the final inflation data needed to calculate the increase.
After Trump approved attacks against Iran on February 28, Iran shut the Strait of Hormuz to most commercial vessels, disrupting the movement of a major share of the world’s crude oil. The Social Security Board of Trustees has warned about the programme’s long-term funding shortfall every year since 1985. The programme’s projected long-term unfunded obligation reached $29.3 trillion in 2026, according to The Motley Fool. This figure represents the projected gap between future income and expenses over the 75-year period covered by the Trustees’ calculations.
The Iran war has also added to inflation pressures.
The resulting shortfall could require benefit cuts estimated at 22%. Inflation could also remain a problem beyond 2026. The effects of tariffs and the Iran war could continue into 2027, keeping pressure on consumer prices. If inflation remains elevated, it could also lead to another relatively large COLA in 2028. The September inflation report, scheduled for October 14 at 8:30 a.m. ET, is the final data point needed to calculate the 2027 Social Security COLA.
The bigger risk is a possible reduction in benefits. If the OASI trust fund’s reserves are exhausted, incoming revenue is projected to be insufficient to pay all scheduled benefits. This would potentially increase Social Security’s benefit expenses further, adding to the programme’s long-term funding challenges. The central concern is that larger Social Security checks may offer short-term relief while increasing pressure on the programme’s long-term finances. If inflation remains high and annual benefit increases stay elevated, the need for future benefit cuts could arrive sooner or the cuts could be larger than currently projected, The Motley Fool warned. The report will help determine the official adjustment rather than leave beneficiaries relying on estimates.
