The Social Security Administration (SSA) announced on the 14th that the Cost-of-Living Adjustment (COLA) for Social Security benefits in 2027 will be 3.6%, resulting in an average monthly increase of approximately $75 for beneficiaries. However, amid rising inflation, many seniors argue that this adjustment is insufficient to offset the persistent climb in prices.
According to ABC 7, this adjustment applies to approximately 73 million retirees and individuals with disabilities who receive monthly Social Security benefits, as well as nearly 7.5 million Supplemental Security Income (SSI) beneficiaries. SSA Commissioner Frank Bisignano stated that this adjustment would help provide greater financial stability for beneficiaries.
Social Security benefits are funded through payroll taxes paid by workers and employers. The cap on earnings subject to these taxes will increase from $184,500 in 2026 to $192,300 in 2027.
This announcement comes as inflationary pressures intensify and the midterm elections approach in just a few weeks. Government data released last month showed that inflation accelerated in August, driven in part by a surge in oil prices following renewed conflict between the U.S. and Iran.
Lorrie Ufkin, a 71-year-old retiree living near Rochester, Minnesota, told the Associated Press that the increase fails to keep pace with changes to Medicare. She noted that a temporary subsidy program—which helps offset premiums for Medicare Part D (prescription drug coverage)—is set to expire at the end of the year. As a result, the monthly cost for a medication that she and her husband both take is projected to jump from $11 to $200 per prescription. Nevertheless, the Centers for Medicare & Medicaid Services (CMS) estimates that most beneficiaries will see only a modest increase in their premiums.
Jaime Jakubczak, a 68-year-old from Buffalo, New York, who retired early at age 55, has recently returned to the workforce to help cover rising property taxes. He remarked that with the costs of food, healthcare, and gasoline remaining high, a 3.6% increase in Social Security benefits is essentially negligible. An AARP poll from September indicates that approximately three-quarters of respondents aged 50 and older believe the 3.5% adjustment planned for next year will be insufficient to keep pace with rising prices.
The Social Security system is also facing a funding crisis. According to the annual report from the Social Security and Medicare Boards of Trustees—released in June 2026—the combined Social Security trust funds, which cover both retirement and disability benefits, will no longer be able to pay out full benefits starting in 2034. At that point, incoming revenue will only be sufficient to cover about 83% of the scheduled benefits.
Congress has yet to enact a fundamental solution. In June of this year, Democratic Senator Elizabeth Warren of Massachusetts and Republican Senator Bernie Moreno of Ohio proposed eliminating the cap on earnings subject to the Social Security payroll tax. They argue that this would generate significant revenue, allowing the Social Security system to remain solvent for another generation. However, the proposal remains controversial, as the Republican Party has consistently opposed tax increases on the wealthy.