Social Security recipients could see their monthly benefits increase by nearly 4% next year, according to early projections for the 2027 cost-of-living adjustment (COLA).

CBS News reported that estimates from retirement and senior advocacy groups currently place the increase between 3.6% and 3.8%, although the final figure will not be determined until October.

The Senior Citizens League is projecting a 3.8% COLA for 2027, while AARP has estimated a slightly lower increase of about 3.6% based on current inflation trends.

The Social Security Administration will calculate the official adjustment using inflation data from July, August, and September.

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W.

The formula uses the average CPI-W reading from the third quarter of the year to determine the following year's benefit increase.

Some senior advocates have argued that CPI-W does not accurately reflect the spending patterns of older Americans, whose budgets often are more heavily affected by costs such as health care, housing, and food.

Groups including AARP have supported using an alternative measure, known as the Consumer Price Index for the Elderly, or CPI-E, which would more closely track expenses for seniors.

If the increase reaches the higher end of current estimates, the average retired worker receiving about $2,000 per month could see an increase of roughly $75 to $80 per month.

The actual increase will vary depending on each recipient's current benefit amount.

The projected increase would follow a 2.8% COLA for 2026 and come after several years of larger adjustments driven by elevated inflation.

Social Security benefits rose 8.7% in 2023, the largest annual increase since 1981, after inflation surged in the wake of the pandemic.

The final 2027 COLA announcement is expected in October, with the new benefit amounts scheduled to take effect in January 2027.