Social Security recipients in the United States will receive a 3.6% COLA for 2027, the largest increase in four years, adding $75 a month ($900 a year) for the average retired worker starting January 2027 for nearly 72 million beneficiaries. However, the Medicare Trustees Report projects the standard Part B premium will rise from $202.90 to $209.50 a month, which could cut the average net gain to about $68.40 a month before other healthcare costs. Part B and Part D deductibles and the Part D out-of-pocket limit are also projected to rise. An AARP poll found 76% of adults aged 50 and over said a projected 3.5% COLA would not keep pace with prices, a view held by 80% of Social Security recipients, and the article suggests the raise may not restore lost purchasing power.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: Social Security 2027 COLA Rises 3 . 6 %, but Medicare Costs Could Eat Into Retiree Extra $75 a Month
Read the original on ibtimes.co.uk ↗
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- The 2027 Social Security COLA Will Boost Average Benefits by $901 Annually. Will It Be Enough?
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Social Security benefits will rise 3.6% starting January 2027, based on the CPI-W index, which tracks prices for working households rather than retirees. The article argues this misses retirees' spending patterns: they spend less on food, housing and transportation but more on healthcare. Using the CPI-E index for people aged 62 and older, the 2024 raise would have been 4% instead of 3.2%, a $62 monthly increase instead of $50. The Senior Citizens League estimates beneficiaries have lost 13.7% of their buying power since 2016, and the shortfalls compound over time. Because Congress is unlikely to act quickly, retirees can offset the gap by generating more investment income or using higher-yielding savings accounts.
- Social Security COLA Tracks Working Households , Not Retirees . Here How Much Bigger 2024 Raise Would Have Been .
Social Security benefit payments will rise 3.6% in January, an adjustment based on the CPI-W index, which the article argues may not fit retirees well. Retirees are considerably older than the average American, spending less on food, housing and transportation but more on healthcare, so the CPI-E index for people aged 62 and over may better reflect their costs. Using CPI-E for 2024 would have produced a 4% raise instead of the 3.2% received, meaning $62 more per month instead of $50. The Senior Citizens League says beneficiaries have lost 13.7% of their buying power since 2016, and most proposed fixes require Congress. The article suggests retirees seek more investment income or higher-yielding savings accounts for idle cash.
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