Millions of US seniors could lose full Social Security COLAs. New proposal may preserve program, but here’s who loses

Key Points:

• The Social Security Administration set the 2026 cost-of-living adjustment (COLA) at 2.8%, effective January 2026, with projections suggesting a 3.6% COLA for 2027, the largest since 2023 if realized.
• The Committee for a Responsible Federal Budget (CRFB) proposes capping COLA increases for the top 25% of beneficiaries based on their primary insurance amount, aiming to limit annual COLA increases for higher earners while preserving full adjustments for lower-income retirees.
• This COLA cap could save $115 billion over 10 years and reduce the program’s 75-year funding shortfall by nearly 10%, although it would not fully solve Social Security’s insolvency, which will require additional reforms.
• The proposal targets higher-income beneficiaries to protect the system’s solvency without cutting benefits for middle- and low-income retirees, but it has not yet gained significant attention from lawmakers.
• Financial experts advise retirees and workers to prepare for potential Social Security changes by maximizing retirement contributions, considering inflation-hedged investments like gold IRAs, and exploring real estate investment platforms to diversify income sources.