Social Security benefits to rise 3.6% in 2027 as inflation reaches 3.7%

Social Security payments will increase 3.6% in 2027, the Social Security Administration announced Wednesday, an adjustment that comes as new figures put annual inflation at 3.7%.

The agency said the average retired worker will receive about $75 more per month, according to the Wisconsin Examiner and KFYR. PBS NewsHour put the average increase at roughly $76 per month, or a little more than $900 over the year.

The Wisconsin Examiner reported that the cost-of-living adjustment will take effect in January for 72 million Social Security beneficiaries, while about 7.3 million Supplemental Security Income recipients will see it starting Dec. 31. KFYR noted that this year's adjustment was 2.8%. PBS NewsHour reported that the 2027 increase is the largest since 2023, when benefits rose 8.7%.

The adjustment is calculated by the Bureau of Labor Statistics by comparing average consumer prices for workers in July through September with the same period a year earlier, PBS NewsHour explained. Shai Akabas of the Bipartisan Policy Center told the outlet the figure is "not wildly outside of the norm," given that inflation has stayed above the Federal Reserve's 2% target since 2021.

Some observers questioned whether the increase will keep pace with costs. PBS NewsHour cited an AARP poll of about 1,000 adults 50 and older in which 76% said a projected 3.5% increase would fall short. Analysts told the outlet that older adults spend more on health care than the urban wage earners the index tracks, and that higher Medicare Part B premiums could offset part of the raise, though Akabas estimated premium increases at likely under $20 per month.

Consumer advisor Clark Howard told WSB-TV the increase will generally help recipients offset inflation. WSB-TV also reported analysis showing wages for American workers are not keeping up with prices, and cited a Goldman Sachs survey in which 58% of respondents said they are on track with retirement savings, down 10 points from last year.

The Wisconsin Examiner reported that the Social Security payroll tax will remain at 6.2%, while the cap on taxable earnings will rise from $184,500 to $192,300 in 2027. The outlet noted that the program faces a funding shortfall and that, without action by Congress, benefits would automatically be reduced beginning in 2032.

According to KFYR, recipients will be able to view their new benefit amounts online by late November, and the agency is expected to begin mailing notices in early December.

Compiled by True News from reporting by WSB-TV, PBS NewsHour, Wisconsin Examiner and KFYR. Each outlet's original story is linked below.

Originally published by True News: https://truenews.bagleyenterprises.net/stories/125