Updated

Updated · tipswatch.com · Jul 26

David Enna Sees 2027 Social Security COLA at 3.6% as Gas Rebound Clouds Inflation

Updated

Updated · tipswatch.com · Jul 26

David Enna Sees 2027 Social Security COLA at 3.6% as Gas Rebound Clouds Inflation

Q: Could volatile summer gas prices in 2026 unexpectedly slash your final Social Security COLA, leaving retirees with far less?

Probably not by a dramatic amount, but summer gas-price swings could still move the final 2027 Social Security COLA up or down. The key reason is the formula. Social Security does not use June inflation or the broader CPI-U. It uses CPI-W, and only the July, August and September 2026 readings count. Those three months are averaged and compared with the same period in 2025. Because gasoline is a volatile part of CPI-W, sharp moves at the pump can meaningfully change the final number. Right now, the main forecasts remain tightly clustered. David Enna of Tipswatch and AARP are at 3.6%, while The Senior Citizens League is at 3.8%. Earlier, some estimates were much higher, including 4.7%, but June’s cooler inflation reading and falling energy prices pulled forecasts down. Enna says June’s drop was helped by cheaper gas, but fuel prices have since risen again, which could keep the COLA from falling much further. So retirees are not looking at a likely collapse from the mid-3% range unless inflation weakens sharply through all three official summer months. The more realistic risk is a modest shift—perhaps a few tenths of a percentage point—rather than a surprise slash. Even if the COLA lands near 3.6%, the average retired-worker benefit of $2,084 would rise about $75 a month to roughly $2,159. But the net gain may feel smaller because Medicare Part B premiums are expected to increase in 2027, and higher-income retirees could also face IRMAA surcharges.

Q: How might a forgotten 2025 financial move suddenly trigger massive Medicare surcharges that wipe out your 2027 Social Security gains?

A forgotten 2025 income spike could trigger 2027 Medicare IRMAA surcharges because Medicare looks back two years, not at your current income. That means a Roth conversion, big capital gain, business or property sale, large IRA withdrawal, or even tax-exempt bond interest reported on your 2025 return can raise your 2027 Part B and Part D premiums. That matters because the projected 2027 Social Security COLA is only about 3.6% to 3.8%—roughly a $75 to $79 monthly increase for the average retired worker. Standard Medicare Part B premiums are also expected to rise, which will already eat into that gain. For higher-income beneficiaries, IRMAA can do far more damage: projected 2027 thresholds are around $112,000 for single filers and $224,000 for married couples filing jointly, with steep jumps above those levels. IRMAA works like a cliff. Go over a threshold by even $1, and you can be pushed into a higher bracket for the full year. Recent bracket examples show Part B premiums rising from the standard level to hundreds more per month, plus separate Part D surcharges. In some cases, that can mean thousands of dollars a year in extra costs—easily wiping out a modest Social Security COLA. If that 2025 income no longer reflects your situation because of retirement, work stoppage, divorce, or death of a spouse, you may be able to ask Social Security for a new determination using Form SSA-44. Otherwise, the surcharge generally stands until lower income shows up on a later tax return.

3 articles · Updated · tipswatch.com · Jul 26

A 3.6% Social Security COLA for 2027 is David Enna’s latest forecast, slightly above the 3.5% June CPI-W baseline and below the roughly 4.0% estimate he had before June deflation.
June CPI-W stood at 333.952, up 3.5% year over year, but the actual adjustment depends on the July-September average of CPI-W, the index Social Security uses instead of headline CPI.
Gasoline is a key swing factor: the national average price rose to $4.11 from $3.87 since July 1, a 6.2% increase that Enna says could add about 0.18% to all-items inflation.
The Cleveland Fed is nowcasting only 0.04% all-items inflation for July, suggesting a modest near-term CPI-W gain even if price pressures build later in August and September.
At 3.6%, the COLA would lift the average retired-worker benefit by about $75 to $2,159 from $2,084, though higher Medicare costs could absorb part of that increase.