Delaying Social Security claims still pays as 2027 COLA nears 3.6%

The Social Security COLA for 2027 is projected at 3.4% to 3.6%, the largest in several years as inflation stays elevated, yet delaying claims past full retirement age still delivers an 8% annual benefit increase.

"You need to protect yourself against living a long life, and you don't want to have regret," said James Mahaney, a certified financial planner and principal at Mavericus Retirement Services in Georgetown, South Carolina. "Social Security is your best tool to get there."

The official COLA announcement is expected Oct. 14 at 8:30 a.m. ET, based on third-quarter CPI-W data. The Senior Citizens League projects 3.6%, up from 2.8% in 2026 and 2.5% in 2025. For the average beneficiary receiving $1,937.53 per month, a 3.6% adjustment would raise payments by $69.75 to $2,007.28. The 2027 increase would follow a 3.2% adjustment in 2024 and an 8.7% jump in 2023, the largest in four decades, while COLAs were zero in 2010, 2011, and 2016.

The decision carries added weight as Social Security's retirement trust fund is projected to run dry in about six years, at which point monthly checks would be funded only by payroll taxes — triggering automatic benefit cuts absent Congressional action. The Committee for a Responsible Federal Budget has proposed capping annual increases for the highest earners, a change that would require legislation.

How COLAs compound delayed benefits

For every year a beneficiary delays past full retirement age up to 70, benefits grow 8%. A retiree eligible for $2,250 per month at 62 would receive $3,000 at full retirement age and $3,960 at 70 before COLAs. Factoring in annual adjustments, those figures rise to $3,205 at 66 and $5,091 at 70, according to Mahaney's research. Waiting from 62 to 70 provides approximately a 76% total benefit boost, with each year's COLA also magnified by roughly 76%.

The 8.7% COLA in 2023 illustrates the compounding effect. A retiree who claimed at 62 received a $225 monthly boost from that adjustment, while one who claimed at 70 received $395, a $170 monthly gap that accumulates to $2,040 over a year and becomes part of the base for every subsequent COLA.

"Having a built-in cost-of-living protection is one of the central things that makes Social Security unique," said Joe Elsasser, a certified financial planner in Omaha, Nebraska, and president of Covisum, a Social Security claiming software company. "That's important to think about on the front end of a Social Security decision."

Claiming strategy for couples and individual circumstances

For married couples, delaying the higher earner's claim increases both retirement benefits and the survivor benefits a spouse may receive. Elsasser advises clients to "model it" rather than act on fear of missing a large COLA.

Mahaney recommends taking the decision year by year. "It's not an irrevocable decision at 62 to delay to 70," he said. "Maybe look at it each year and say, 'Well, boy, that's a higher cost-of-living adjustment. I could take even greater advantage of that in nominal dollars by delaying Social Security.'"

The trade war between the U.S. and Canada may have only a moderate effect on the 2027 COLA estimate since it occurred late in the third quarter, said Mary Johnson, an independent Social Security and Medicare policy analyst. Inflation pressures from the Iran war have been a key driver of the elevated COLA projections.

Readers should verify the final COLA figure against the Social Security Administration's official announcement on Oct. 14, as projections are estimates subject to revision based on third-quarter inflation data.

This article is for informational reference only and does not constitute professional advice.