If next year’s benefits increase was figured today, Social Security recipients would get a higher Cost of Living Adjustment than they received last year.
That’s not necessarily good news, however.
The latest forecast from The Senior Citizens League predicts a 3.8% COLA for 2027, 1.0 percentage point higher than this year’s 2.8%. The prediction is based on the new the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, released last week. The CPI-W is currently 4.4%.
COLA is determined by the CPI-W’s percentage increase in the third quarter of the year – July, August and September. That figure is compiled and then compared to the CPI-W for the same period the previous year. The year-over-year difference is the new COLA payable in the coming year.
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If the 3.8% COLA holds, the average benefit for retirees would rise by $77. Social Security currently pays the average retiree $2,026.41 per month. With the predicted COLA, payments would increase to $2,103.41.
That’s still short of the average cost of what it takes to live in the U.S., TSCL said, especially since COLA increases have failed to meet rising inflation.
“A 3.8 percent COLA might sound like a lot compared to last year’s 2.8 percent, but it won’t be enough to make up the difference between what seniors bring in and what they need to live with dignity. And that’s the point of the program: It’s to grant `some measure of perfection against the loss of a job and against poverty-ridden old age,` as Franklin D. Roosevelt said when he signed Social Security into law 91 years ago,” TSCL Executive Director Shannon Benton said. “Are we really able to say we’re fulfilling that goal right now?”
Factoring in rent for a 1-bedroom apartment and basic living expenses, the average senior cost of living for one person is about $2,700 a month. And, the group said, 24.8 million older Americans – more than at any point – draw all their retirement income from Social Security.
TSCL estimated that 57 percent of seniors survive on less than $2,000 a month, while 13 percent get by on less than $1,000, placing an estimated 5.6 million below the federal poverty line.
“We’re seeing inflation on the rise when more than half of seniors already can’t afford basic living standards. We’re talking about food, a roof over their head, and transportation. Many seniors already have to skip doctor’s appointments due to costs, which costs all of us more in the long run when we swap preventative care for emergency care,” Benton said.
The official 2027 COLA will be announced in early October, payable in January 2027.
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