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For millions of Social Security beneficiaries, there’s both good news and bad news for next year. The good news is that payments could be on course for a big hike in 2027. The bad news is that this hike is a result of the surge in inflation caused by President Donald Trump’s economic policies and war in the Middle East.
In other words, older Americans and retirees are due for a “Trump Bump” in 2027 just to offset the loss in purchasing power they’re experiencing in 2026.
Here’s why this matters for everyone, regardless of whether they’re working or retired.
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‘Trump Bump’ from inflation
Since the mid-1970s, the Social Security Administration (SSA) has implemented an automatic annual Cost-of-Living Adjustment (1) (COLA).
“The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation,” says the SSA on their website.
COLA is determined by the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. For example, the 2.8% COLA for 2026 (2) was based on the actual inflation that Americans experienced from the third quarter of 2024 through the third quarter of 2025.
But this year has been dramatic, to say the least. Not only has the Trump administration unleashed a trade war on nearly every trading partner across the world, but it has also been engaged in an on-again, off-again conflict with Iran since February 2026 — and both have caused inflation.
The surge in inflation has even raised the prospect of a 4.7% COLA in 2027, according to forecasts by independent Social Security and Medicare policy analyst Mary Johnson, cited by CNBC (3). If accurate, this would be the fourth-largest COLA in the last 25 years (1). For reference, COLA reached 5.9% and 8.7% in 2022 and 2023, respectively, under the Biden administration.
However, we’re still months away from the official COLA announcement, and a lot could change by then.
“There’s a considerable likelihood that it’s going to climb even higher than 4.7% as data continues to come in, especially on the gasoline prices,” Johnson told CNBC.
Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going
Combating inflation on your own
Social Security beneficiaries are fortunate to get this automatic offset. However, for those still working or years away from retirement, there’s no such government-mandated shield for inflationary surges.
As of June 2026, wage growth is running at just 3.6%, according to the Federal Reserve Bank of Atlanta (4). So, if you’re looking to preserve purchasing power, you’ll probably need to look beyond your paycheck.
But even if you enjoy COLA on your benefits, you still might want to have a wealth preservation plan so that your nest egg isn’t being steadily eroded by inflation. For many investors, the ideal safe havens are hard assets like gold and real estate.
Going for gold
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for anyone worried about inflation, geopolitics and tax hikes.
To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.
Hedge your portfolio with real estate
Real estate can offer a similar hedge against inflation — but with some added cash flow from rental income. And you don’t need to be a millionaire to get started: Fractional ownership through platforms like Arrived have greatly democratized this asset class in recent years.
Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100.
For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
Another option for investors
For risk-averse investors, a robust Certificate of Deposit (CD) could also be worth seeking out. CDs offer a chance to lock in interest rates for multiple years, so that you can reliably grow your wealth regardless of what’s happening in the rest of the economy.
For those seeking predictable, reliable growth, a platform like CD Valet can help you find higher-yield options that work for you, whether you’re saving for something soon or building a cushion for the long haul.
CD Valet tracks over 40,000 verified rates from FDIC-insured banks and NCUA-insured credit unions nationwide. Unlike other websites, they show every publicly available rate, ensuring you have a comprehensive view of the market.
Plus, their CD rates are updated continuously, so you can shop, compare and open CDs with ease.
Getting some help
Picking the right investments and balancing tax implications isn’t easy, but the good news is that you don’t have to do it alone. Hiring a professional financial advisor could be the savviest money move you make, especially if your nest egg is worth $250,000 or more.
Managing withdrawals, minimizing tax exposure and ensuring long-term sustainability often requires greater coordination and strategic planning. In these cases, working with a financial advisor can help reduce costly mistakes.
If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.
Simply answer a few questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.
You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.
WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Social Security Administration (1), (2); CNBC (3); Federal Reserve Bank of Atlanta (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
