Retirees may see a notable increase in their Social Security benefits in 2027, as The Senior Citizens League (TSCL) projects a cost-of-living adjustment (COLA) of 3.8%. This projected raise, which is subject to confirmation in October, represents a 1.0 percentage point increase compared to last year's 2.8% adjustment.
The TSCL's forecast suggests that the average Social Security check, currently around $2,071, could rise to approximately $2,149. This would translate to an increase of about $78 per month for beneficiaries. The organization also noted that if calculations are based on a different average benefit of $1,937, the increase would be $73.62, bringing the monthly payment to $2,011.
This potential increase comes as many seniors continue to face high costs for essentials such as gas, groceries, and energy. The COLA is determined annually by the percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter, encompassing July, August, and September.
Social Security 2100 Act
Beyond the projected COLA, there is a renewed effort in Congress to pass the Social Security 2100 Act. This bill, first introduced in 2017, aims to implement broader changes to the Social Security system. Key provisions include a higher minimum benefit, set at 125% of the federal poverty line, and a shift in how COLAs are calculated. The act proposes using the Consumer Price Index for the Elderly (CPI-E) instead of the current CPI-W.
The CPI-W tracks the spending patterns of working-age individuals, including costs for food, housing, energy, transportation, and healthcare. In contrast, the CPI-E is designed to more accurately reflect the expenses incurred by individuals aged 62 and older, which advocates argue would better serve senior recipients.
The Social Security 2100 Act also includes measures to strengthen the program's financial stability. It proposes increasing the Social Security payroll tax and extending its application to incomes exceeding $400,000. These changes are intended to help secure the program's trust fund, which is currently projected to become depleted by late 2032.
Despite the potential benefits of the Social Security 2100 Act, experts like those at TSCL express skepticism about its likelihood of passage in the current political climate. Shannon Benton, Executive Director of TSCL, has described the bill as the "gold standard" for Social Security reform, encompassing many desired changes for older Americans. Benton also highlighted the growing issue of poverty among seniors, noting that a higher minimum benefit could help alleviate this trend, though she acknowledged that more comprehensive solutions might be necessary.