Social Security recipients will see their benefits climb 3.6 percent in 2027, the Trump administration announced Wednesday.
Under the latest cost of living adjustment (COLA), Social Security retirement benefits will rise by an average of $75 per month, according to the Social Security Administration (SSA). Last year’s COLA came in at 2.8 percent.
The adjustment applies to nearly 72 million Social Security beneficiaries, whose average benefit was nearly $1,942 in August, the SSA reported.
The increase will also cover the 7.3 million people who receive Supplemental Security Income (SSI), including 2.5 million who also collect Social Security benefits. The average SSI payment was roughly $738 in August, according to the agency.
The SSA unveiled the 2027 COLA after the Bureau of Labor Statistics released September inflation figures, as measured by the consumer price index (CPI). Annual inflation hit 3.7 percent in September, up from 3.4 percent in August.
SSA Commissioner Frank Bisignano said the adjustment will provide beneficiaries with “greater financial stability,” with inflation having stayed above 2 percent for more than five years.
The 3.6 percent increase ties 2011’s adjustment for the fifth-highest COLA since 1991. It also matched what AARP officials had predicted.
“We’re expecting about 3.6 percent,” Bill Sweeney, AARP’s senior vice president of government affairs, said Tuesday on NewsNation’s “The Hill.”
“That would be … about $75 a month for most people or about $900 over the course of a year,” he added.
The Senior Citizens League had projected a 3.5 percent COLA for next year.
However, many older Americans say that may not be enough. Roughly three-quarters of adults 50 and older who took part in a recent AARP survey said a 3.5 percent adjustment would fail to keep pace with rising prices. About 7 in 10 respondents said an increase of 5 to 8 percent would be sufficient.
Concerns are also mounting over the program’s long-term finances. Earlier this year, Bisignano and other Trump administration officials projected that Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay full scheduled benefits only until the fourth quarter of 2032. After that, the fund will be able to cover just 78 percent of benefits.
On Wednesday, officials with the Committee for a Responsible Federal Budget (CRFB) pointed to that looming deadline, warning that the coming cut “could wipe out the previous nine years’ worth of COLAs” in 2032.
“To help restore Social Security solvency, lawmakers should consider reforming future COLAs,” the CRFB said in a statement. The group suggested the SSA could use the chained CPI rather than the baseline CPI.
Annual inflation under the chained CPI was 3.5 percent in September. Chained CPI inflation consistently runs lower than baseline CPI inflation.
The CRFB also proposed capping adjusted benefits for the program’s highest-paid recipients, noting that the 2027 COLA will increase benefits for the “very richest” beneficiaries by more than $2,200.
Despite the administration’s own warnings, Bisignano insisted Monday that the nine-decade-old program is here to stay.
“It’s 90 years old. It’ll be around for another 90 years,” Bisignano said on CNBC’s “Squawk Box.”
