Social Security to Switch Inflation Measure in December 2027, Raising Long-Term Benefit Costs

Starting December 2027, Social Security will compute annual cost-of-living adjustments using CPI-E instead of CPI-W. CPI-E reweights inflation toward healthcare and shelter—costs that consume more of retiree budgets. Historically, CPI-E grows faster than CPI-W by 0.2 to 0.3 percentage points annually. Over a 28-year retirement, that compounds into meaningfully higher lifetime benefits. Pension plans and benefit offset calculations need updating before the switch takes effect.