Even today, Social Security remains a crucial aspect of American life. With rising inflation, Social Security and Supplemental Security Income recipients will receive an official cost-of-living adjustment (COLA) to counter increasing expenses by 2027. It is expected that the increase in COLA will be announced in mid-October and calculated based on average inflation in the economy, per Fox 4 News.Â
The Senior Citizens League (TSCL), a nonprofit working for senior citizens, has predicted a 3.8% increase in the cost-of-living adjustment for 2027. It also estimated the projected rise in average monthly benefits to about $73.62. However, the executive director of TSCL has voiced concerns about American seniors making up a growing chunk of the homeless in the country.Â
Social Security recipients to get a hike
COLA 2027 will not be announced until mid-October. BY: Pexels
The TSCL estimates its projection based on the Consumer Price Index, the Federal Reserve Interest Rate, and the National Unemployment Rate from the US Bureau of Labor Statistics. According to that, the average monthly benefits will likely increase from $1,937 to $2,011 next year. The COLAs issued for 2026 were 2.8%, which increased payments to about $56, per the Detroit Free Press. The official COLA for 2027 will be announced on Wednesday, Oct. 14.Â
While the TSCL prediction is reassuring for Social Security recipients, the 2027 COLA is planned based on the average inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, Aug. and Sept. 2026. It is possible the original COLA could vary from TSCL’s 3.8% projection. The senior advocacy group releases monthly predictions for the adjustments.Â
What is COLA?
The Cost-of-Living Adjustment is an annual benefit change to Social Security and Supplemental Security Income payments to keep pace with inflation. This proportional increase in benefits is done so recipients can sustain their purchasing power for daily items necessary for sustenance. These items include gas, food, clothing, and more. The benefit change is implemented at the start of every year.Â
Social Security is paid to retired workers, survivors, and people with disabilities through the Social Security Administration. While the Supplemental Security Income program provides benefits to unemployed, senior citizens aged 65 or older, and disabled people.Â
Social Security retirement fund at risk
TSCL exec director Shannon Benton said, “The reality is that poverty is increasing rapidly among American seniors, who make up the fastest-growing portion of the homeless population.” As per this year’s projections, the “go-broke” date for the Social Security retirement trust fund has inched a year closer, to 2032.Â
Officials have called for a reform in Social Security benefits before the fund shortfall. Otherwise, it would result in a 17% cut to benefits. “Congress needs to act,” said AARP’s CEO Myechia Minter-Jordan.
