Social Security benefits increasing by 3.6 percent in 2027

Social Security benefits will increase by 3.6 percent in 2027, the Trump administration announced Wednesday.

With the latest cost of living adjustment (COLA), Social Security retirement benefits will increase by $75 per month on average, according to the Social Security Administration (SSA). Last year’s COLA was 2.8 percent.

The COLA applies to the nearly 72 million Social Security beneficiaries, who received an average benefit of nearly $1,942 in August, the SSA reported.

It will also take effect for the 7.3 million people who receive Supplemental Security Income (SSI), 2.5 million of whom also receive Social Security benefits. The average SSI payment was about $738 in August, per the SSA.

The SSA released its COLA for 2027 after the Bureau of Labor Statistics released inflation data for September, as measured by the consumer price index (CPI). Annual inflation was 3.7 percent in September, up from 3.4 percent in August, according to the CPI.

Frank Bisignano, the commissioner of the SSA, said the COLA will give beneficiaries “greater financial stability,” as inflation has remained above 2 percent for five-plus years.

The adjustment from the SSA is tied with 2011’s increase of 3.6 percent for the fifth-highest COLA since 1991. It was also in line with what officials at the AARP anticipated.

“We’re expecting about 3.6 percent,” Bill Sweeney, AARP’s senior vice president of government affairs, said Tuesday on NewsNation’s “The Hill.”

“That would be … about $75 a month for most people or about $900 over the course of a year,” he added Tuesday.

The Senior Citizens League also projected a 3.5 percent COLA for next year.

Roughly three-quarters of adults ages 50 and older who responded to a recent AARP survey said an adjustment of 3.5 percent would not keep up with rising prices. Instead, about 7 in 10 respondents said an increase of between 5 percent and 8 percent would be sufficient.

Earlier this year, Bisignano and other Trump administration officials projected that Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund will be able to cover the entirety of scheduled benefits only until the fourth quarter of 2032.

At that point, the OASI fund will only be able to cover 78 percent of benefits.

Officials from the Committee for a Responsible Federal Budget (CRFB) referenced the looming deadline on Wednesday, saying the impending cut “could wipe out the previous nine years’ worth of COLAs” in 2032.

“To help restore Social Security solvency, lawmakers should consider reforming future COLAs,” the CRFB said in a statement, noting the SSA could follow the chained CPI instead of the baseline CPI.

Annual inflation, as measured by the chained CPI, was 3.5 percent in September. Chained CPI inflation consistently runs below baseline CPI inflation.

CRFB officials also proposed capping adjusted benefits for those who receive the most from the SSA. The COLA for 2027 will boost benefits for the “very richest” recipients by more than $2,200, the committee noted.

Despite the administration’s warnings, Bisignano said Monday that Social Security, a nine-decade-old program, will be around for the foreseeable future.

“It’s 90 years old. It’ll be around for another 90 years,” Bisignano said on CNBC’s “Squawk Box.”