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Social Security's 2027 Cost-of-Living Adjustment (COLA) Estimate Is Getting a "Trump Bump" -- Here's How Much Extra You Might Receive

April 18, 2026 — 06:56 am EDT

Written by

Sean Williams for

The Motley Fool->

Key Points

- There's arguably no announcement more anticipated by Social Security recipients than the annual COLA reveal in October.

- Social Security's 2027 cost-of-living adjustment estimates are climbing as a result of Donald Trump's actions in Iran.

- However, a second consecutive year with a Trump bump won't offset decades of disappointment for Social Security beneficiaries.

- The $23,760 Social Security bonus most retirees completely overlook ›

In March, the average retired worker brought home a Social Security benefit of $2,079.49. Though this annualizes to less than $25,000, this income is nevertheless vital to helping aged workers make ends meet.

For many of the 54.1 million retired workers currently receiving a Social Security payout, no annual announcement is of greater importance than the cost-of-living adjustment (COLA), which is revealed by the Social Security Administration (SSA) in October.

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For a second consecutive year, Social Security's COLA is subject to an interesting quirk. Namely, actions taken by President Donald Trump will directly affect how much beneficiaries are bringing home each month in 2027.

President Trump delivering remarks. Image source: Official White House Photo by Joyce N. Boghosian, courtesy of the National Archives.

What, exactly, is Social Security's COLA?

However, before digging into the details of how President Trump's policies can impact Social Security payouts (again), it's important to understand what Social Security's cost-of-living adjustment is and how it's calculated.

Imagine that you're looking at a basket of hundreds of goods and services that seniors regularly purchase, and you notice that the aggregate cost of this basket has increased by 2% from the previous year. If Social Security benefits remained unchanged, recipients would lose buying power over time. Social Security's COLA is the near-annual "raise" passed along to recipients that attempts to keep them on par with inflation (i.e., rising prices).

For the last 51 years, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) has been the program's inflationary tether. The CPI-W has over 200 spending categories with unique percentage weightings. These percentages allow the CPI-W to be expressed as a single figure each month to quickly determine if prices are collectively rising (inflation) or falling (deflation).

Although the U.S. Bureau of Labor Statistics reports the CPI-W monthly, only trailing 12-month readings from the third quarter (July – September) are used in the cost-of-living adjustment calculation. If the average third-quarter CPI-W this year is higher than the same period in 2025, beneficiaries are due a raise.

The amount that benefits rise is determined by the year-over-year percentage increase in average third-quarter CPI-W readings, rounded to the nearest tenth of a percent.

A higher inflation rate has led to larger Social Security COLAs in recent years. US Inflation Rate data by YCharts.

Social Security payouts are in line for another "Trump bump"

Making history has been something of the norm for America's foremost retirement program over the last year. In May 2025, the average retired-worker benefit surpassed $2,000 for the first time since Social Security's inception.

Additionally, the 2.8% cost-of-living adjustment passed along this year marks the fifth consecutive year that benefits have risen by at least 2.5%. The last time that happened was three decades ago.

But what's noteworthy about the 2.8% raise beneficiaries received in 2026 is that it was aided by a "Trump bump." Donald Trump's tariff and trade policy increased prices on select imported goods and domestic manufacturers, leading to sticky goods sector inflation. In other words, Trump's tariffs directly led to higher nominal Social Security checks for recipients this year.

Based on early estimates for Social Security's 2027 COLA, beneficiaries are likely to see a Trump bump, yet again -- but this has nothing to do with tariffs.

At President Trump's command, U.S. military forces, along with Israel, commenced attacks on Iran beginning Feb. 28. Shortly after this conflict began, Iran closed the Strait of Hormuz to virtually a