Social Security sets 2027 COLA increase at 3.6%: What does that mean for Long Island seniors?

The Social Security Administration announced Wednesday a 3.6% cost-of-living increase for Social Security benefits in 2027 — a higher increase than usual, but still not enough to keep up with inflation on Long Island.

Starting in January, nearly 72 million Social Security recipients will see an average retirement benefits increase of $75 per month, the Social Security Administration said in a news release. More than 480,000 retired Long Islanders receive Social Security benefits, according to the agency. The increase falls behind inflation rates for the New York metro area, which was 4.5% year over year in September.

“It’s one of the highest [increases] in several years. But the cost of living assessment, based on consumer price index for wage and clerical workers, does not reflect the inflation and costs that seniors are seeing,” said Martha Shedden, president of the Melville-based National Association of Registered Social Security Analysts, also called NARSSA, a national group of Social Security experts. The last biggest increase was 8.7% in 2023, according to AARP.

The yearly effort to help benefits keep pace with a higher cost of living can be eroded by Medicare premiums and possibly income tax, so seniors aren’t necessarily pocketing the full 3.6% increase, she said. 

As the senior population on Long Island grows, so does the number of seniors in the region living in poverty, increasing 62% between 2013 and 2023, Newsday has reported. That’s more than twice the growth rate, which was 24% during that period. 

Seniors living alone on Long Island need an annual income ranging from $37,000 to $64,000 to cover a basic budget, depending on medical expenses and whether they rent or are still paying a mortgage on their home, according to the Elder Index, a University of Massachusetts Boston tool that measures the cost of aging in place.

Many Long Island seniors also rely primarily on their Social Security income, with around 45.3% of retirees older than 70 reporting Social Security as their only retirement income in 2023, Newsday has reported. Financial experts typically recommend saving around 25 times your annual income for retirement, an amount that might surpass $3 million for Long Islanders. 

There’s not a lot seniors can do about the COLA increase, Shedden said, advising retirees budget carefully and remain aware of what they’re spending money on. 

Individuals with online Social Security accounts will be able to view their COLA notice online in late November, and notices will come via mail in December. Individuals who do not already have an online account must enroll in paperless notices by Nov. 18 to view the COLA notice online, the Social Security Administration said. 

COLA calculations are set by the Social Security Act, which ties the annual adjustment to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as determined by the Department of Labor’s Bureau of Labor Statistics, the Social Security Administration said in a statement. 

CORRECTION: More than 480,000 retired Long Islanders receive Social Security benefits, according to the Social Security Administration. An earlier version of this story cited the wrong data set from the agency.