Daily News 19

Tag: Cost-of-living adjustment

  • TSCL Predicts 3.5% COLA With One Month Until Announcement

    TSCL Predicts 3.5% COLA With One Month Until Announcement

    The Senior Citizens League Predicts 3.5% COLA for Social Security in 2027

    The Senior Citizens League (TSCL) has released its final prediction for Social Security’s 2027 Cost of Living Adjustment (COLA), forecasting a 3.5% increase. This projection is 0.1 percentage points lower than last month’s estimate but remains 0.7 percentage points higher than the 2.8% COLA applied for 2026 and a full percentage point above the 2.5% adjustment for 2025.

    Key Details Behind the 2027 COLA Projection

    The Social Security Administration will announce the official 2027 COLA on October 14, 2026, when the Bureau of Labor Statistics (BLS) releases the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September. The government calculates the COLA by averaging the yearly change in the CPI-W for July, August, and September. The August CPI-W, released today, came in at 3.5%, while the July CPI-W, released last month, registered 3.4%.

    What This Means for Beneficiaries

    If TSCL’s projection holds, the average monthly benefit check will rise by $67.90. The current average beneficiary receives $1,940.08 per month; a 3.5% COLA would increase that amount to $2,007.98. The adjustment applies a percentage increase to all benefit checks. For example, a beneficiary currently receiving $2,000 per month would see their check grow to $2,070 under the predicted COLA. The new COLA takes effect on January 1, 2027.

    Senior Dissatisfaction With Recent COLAs

    Seniors have expressed strong dissatisfaction with the last two COLAs. According to TSCL’s 2026 Senior Survey, 89% of older Americans believed the 2026 COLA was too low and that their monthly benefits would fall behind inflation. The survey also found that 44% of seniors rely entirely on Social Security for their income.

    Expert Commentary: Shannon Benton on COLA Limitations

    TSCL Executive Director Shannon Benton highlighted the uncertainty surrounding the final CPI-W reading and the structural shortcomings of the current COLA mechanism:

    “The biggest thing we’re watching with the COLA announcement coming are short-term shocks to the economy that push inflation way up or down in the next 30 days. Of the three CPI-W figures used to calculate the COLA, two are already in.”

    “No matter if the COLA announcement comes in slightly higher or slightly lower than our prediction, seniors will probably end up disappointed in the long run. The reality is that older Americans allocate their budgets differently than people still in the workforce, so inflation hits them differently. The CPI-W captures the experience of urban wage earners, which doesn’t represent the average senior’s budget.

    “The COLA only happening once a year puts life on hold for a lot of seniors. When prices rise, they don’t rise next January when your benefit check goes up. They rise right now. We need to consider COLAs that compound quarterly or monthly so seniors can keep up throughout the year when inflation comes in above Federal Reserve targets, like in 2026.”

    About The Senior Citizens League

    The Senior Citizens League (TSCL) is one of the nation’s largest nonpartisan seniors’ groups. Established in 1992 as a special project of The Retired Enlisted Association, its mission is to promote and assist members and supporters, educate and alert senior citizens about their rights and freedoms as U.S. citizens, and protect and defend the benefits seniors have earned and paid for. TSCL consists of vocally active senior citizens concerned about the protection of their Social Security, Medicare, and veteran or military retiree benefits. To learn more, visit https://seniorsleague.org/about-us/.

    About the TSCL COLA Model

    TSCL issues a new prediction of the next Social Security COLA each month using its statistical model. The model incorporates the Consumer Price Index, the Federal Reserve interest rate, and the national unemployment rate to make its predictions, updating throughout the year in response to economic conditions. A new version of the model, v1.2, was released in January 2025. This version updates data handling to align with the federal fiscal year rather than the calendar year and reduces each prediction’s reliance on previous predictions made throughout the federal fiscal year. For additional information about the model, contact Alex Moore, TSCL’s statistician, at amoore@tsclhq.org.

    Contact Information

  • Social Security Benefits in 2027: Key Changes Explained

    Social Security Benefits in 2027: Key Changes Explained

    Social Security remains the financial backbone for millions of retirees, yet the program often generates confusing headlines. As 2027 approaches, several key adjustments are set to take effect — ranging from the full retirement age and cost-of-living adjustment (COLA) to taxable earnings caps and earnings limits. Here is a clear breakdown of what beneficiaries and workers can expect.

    Full Retirement Age Has Finished Climbing

    A persistent concern among retirement planners is the belief that the full retirement age (FRA) will continue to rise. According to Geoffrey Schmidt, a certified public accountant and founder of Holy Schmidt!, a retirement education resource, that climb has ended.

    “It doesn’t. It has finished its long, slow climb to 67. Anyone born in 1960 or later has a full retirement age of exactly 67, and that group reaches it in 2027,” Schmidt said. “Under current law, it does not go any higher. So if you’ve been worried they’ll keep moving the goalposts on you, at least on the retirement age, that increase is over.”

    Read more: What’s the retirement age for Social Security, 401(k)s, and IRA withdrawals?

    Cost-of-Living Adjustment (COLA) Expected Around 3.5%

    The annual COLA is a critical metric for beneficiaries. The official 2027 increase will be announced on October 14 following the release of the Consumer Price Index report. Current estimates place the adjustment in the 3.5% range.

    The average monthly Social Security benefit for a retiree in July was just over $2,000. AARP projects a 3.5% hike would add approximately $73 to that average check.

    “The average monthly benefit for a surviving spouse ($1,933) would rise by about $68, and Social Security Disability Insurance for the average worker with a disability ($1,635) would increase by about $57 a month,” AARP said in an analysis.

    Schmidt noted that if the final COLA lands near 3.6%, it would represent the largest increase since 2023. He also offered an important caveat regarding the net impact.

    “A COLA isn’t really a raise; it’s catch-up for inflation you already paid, and the 2027 Medicare Part B premium, which comes out later in the fall, usually eats part of it before you ever see it,” he added.

    Read more: Here’s what your Social Security COLA could be in 2027

    Maximum Taxable Earnings and Earnings Test Limits Rising

    Two additional adjustments will be finalized in October. High-income earners will see a higher maximum taxable earnings cap. The 2026 cap was $184,500; forecasts suggest the 2027 cap will be around $190,200. This would subject an additional $5,700 of income to Social Security tax, amounting to roughly $353 more per year for workers earning above the threshold.

    The earnings test limits — which apply to those who claim benefits before reaching full retirement age while continuing to work — are also expected to increase:

    • The lower annual threshold (for those under FRA all year) is likely to rise from about $24,480 to $25,200.
    • The upper threshold (for the year a worker reaches FRA) is projected to move from approximately $65,160 to near $67,200.

    “For most retirees who are simply collecting a check, neither one will affect you,” Schmidt said.

    What’s Not Changing: No Benefit Cuts in 2027

    Despite alarming headlines about the program’s long-term solvency, no benefit reductions are scheduled for 2027 under current law. Schmidt urged recipients to ignore the “scary headlines.”

    “Nothing taking effect in 2027 cuts your benefit or rewrites the rules against you. The ‘Social Security is running out of money’ conversation is about late 2032, not next year. Your 2027 check is not in jeopardy.”

    Read more: Will Social Security go broke in 2032? Here is what’s happening.