Social Security 2027 COLA predicted to rise to 3.9% amid inflation
Fox Business • • business
Key Points:
- Social Security beneficiaries are projected to receive a 3.9% cost-of-living adjustment (COLA) in 2027, up from 2.8% this year, according to The Senior Citizens League (TSCL), resulting in an average monthly benefit increase of $81.17.
- The increase in COLA is driven by rising inflation, particularly due to elevated oil prices, which impact household expenses directly and through higher transportation costs.
- The nonpartisan Committee for a Responsible Federal Budget (CRFB) estimates a slightly lower 3.8% COLA for 2027, with a possible range between 3% and 4.5%, depending on inflation data over the next five months.
- CRFB warns that if wages do not increase alongside inflation, Social Security's budget deficit will worsen by approximately $300 billion over the next decade, accelerating the depletion of the old age trust fund from late 2032 to earlier in the year.
- Once the trust fund is depleted, benefits could be cut by about 25%, effectively erasing nearly a decade of COLA gains; CRFB has proposed measures such as capping COLAs for high earners to improve program solvency.