Social Security's Trump Bump-Powered 2027 COLA Is the 5th Largest in 35 Years, but It Comes at a Potentially Steep Cost

Key Points:

• Social Security's 2027 cost-of-living adjustment (COLA) will increase benefits by 3.6%, marking one of the largest raises since 1993 and the fifth-largest in 35 years, with average monthly payouts rising by about $75 for retired workers.
• This significant COLA is driven by inflation influenced by former President Trump's policies, including tariffs that raised consumer prices and the Iran war, which disrupted energy supplies and increased fuel costs.
• While higher Social Security benefits are necessary to keep pace with inflation, large increases exacerbate the program's long-term financial challenges, contributing to a projected $29.3 trillion unfunded obligation over 75 years.
• The Old-Age and Survivors Insurance (OASI) trust fund, which finances benefits for retired workers and survivors, is expected to deplete its reserves by late 2032, potentially triggering a 22% cut in benefits if no changes are made.
• The recent "Big, Beautiful Bill" tax and spending law passed in 2025 has already accelerated the depletion timeline of the OASI trust fund, highlighting the unsustainability of current benefit and COLA levels.