Social Security recipients on track for biggest raise in 4 years

Social Security recipients are in line to receive a benefit increase in 2027, experts say.

Monthly payments are expected to rise 3.5 percent when the Social Security Administration announces its cost-of-living adjustment on October 14, according to advocacy group The Senior Citizens League.

A 3.5 percent increase would raise the average benefit payment from $1,941.76 to $2,009.72, according to the Social Security Administration’s latest data.

While the projected increase will be the highest in four years, it’s still not enough to offer a stable retirement, the league said.

“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 organization wrote.

Many retirees have a fixed income with little opportunity to increase what they earn each month, leaving them more financially vulnerable to rises in cost-of living, the league said.

The Social Security Administration calculates cost-of-living increases by comparing the average inflation rate from July to August to the same period last year.

That method has led to increases ranging from a low of 1.3 percent to a high of 8.7 percent in the past six years, according to the league.

The Senior Citizens League argues that because inflation changes from month to month, an increase set to kick in January 1 won’t help seniors struggling with cost-of-living now.

“When prices rise, they don’t rise next January when your benefit check goes up,” Benton wrote. “They rise right now.”

The Social Security system was started to provide American workers with a stable source of retirement income. However, that stability is slipping.

A key source of funding for payments will likely run out by 2032, experts say, which could lower monthly payments by 22 percent, according to federal projections.

A cut of that magnitude would reduce the current average Social Security payment from $1,941.76 to $1,514.57 – a difference of $427.19.

Rumblings of future benefit cuts have Americans worried.

Some 40 of retirees aren’t confident that Social Security or Medicare, a low-cost health insurance option for retired workers, will “provide benefits of equal value in the future,” a study by nonpartisan think-tank Employee Benefit Research Institute noted earlier this year.