Your Social Security COLA could go up another $71 per month in 2027. That’s not necessarily good news.

A larger Social Security cost-of-living adjustment (COLA) may look like a raise, but it functions as a mirror of inflation. An extra $71 per month in 2027 would reflect faster growth in the consumer price index used to calculate the annual adjustment, not an improvement in retirees' purchasing power. The COLA mechanism exists to keep benefits level in real terms, so a bigger number generally means prices rose more than previously assumed.

For markets, that distinction matters. Persistent inflation can keep pressure on the Federal Reserve's policy path, influencing rate expectations, bond yields, and equity valuations. It also shapes how investors think about income sources that adjust for inflation versus those that don't.

What to watch: the actual CPI-W readings through the third quarter, which determine the final figure, and whether inflation cools before the adjustment is set. Until then, a higher projected COLA is best read as a signal about prices, not a windfall.