Anyone who’s watched the numbers make their seemingly never-ending climb at the gas pump this year would likely not be surprised to learn that the Iran war and inflation have combined to make modern living (and spending) expensive.
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Indeed, CNBC reported that inflation is at its highest level in two years. Additionally, the average gas price in America as of April 15 is $4.108 per gallon (it was only $3.17 this time last year).
That said, some help may be on the way for retirees.
How Did Gas and Inflation Get So High?
Following the COVID-19 pandemic, even as demand for energy and goods increased, supply chains remained disrupted — a mismatch that drove up prices and inflation as a kind of economic pandemic hangover. Meanwhile, inflation was also more broadly increased by the high stimulus spending during COVID-19, which drove up consumer demand, along with higher wages and borrowing costs.
Additionally, oil production and distribution has been drastically disrupted by geopolitical upheavals, most recently the Iran war. Approximately 20% of the world’s oil supply passes through the nearby Strait of Hormuz, which has been closed and is slowing oil distribution, leading to spiking prices at the gas pump.
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What About Social Security?
While high gas prices have increased the current financial crunch in America, help could be on the way for Social Security recipients.
As reported by CNBC, Mary Johnson, an independent Social Security and Medicare policy analyst, has predicted the 2027 Social Security cost-of-living adjustment (COLA) could be a sharp 3.2% in 2027. Johnson’s projection is based primarily on the March consumer price index data that revealed inflation’s most recent near-record highs.
COLA is the annual adjustment to Social Security benefits that keeps the payouts in line with current inflation levels. In 2026, the COLA boosted the average monthly Social Security check by 2.8%. Before the Iran war began (and gas prices skyrocketed), early estimates predicted a 2027 COLA of 2.8% or less.
A COLA of 3.2% would overall be in line with the decade COLA average of 3.1% — though that average is somewhat offset by the extreme post-pandemic COLA hikes of 5.9% in 2022 and 8.7% in 2023, per CNBC.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: How Gas Prices Just Changed Your 2027 Social Security Check
