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Social Security retirees will receive a 3.6% cost-of-living increase next year — averaging another $75 a month — but experts warned Wednesday that the boost may do little to offset mounting household expenses.
The Social Security Administration announced the 2027 cost-of-living adjustment Wednesday, handing a bigger raise to the 73 million Americans who collect benefits than they received this year.
Nearly 7.5 million people who receive Supplemental Security Income will also see their payments rise.
The increase comes as stubborn inflation continues to squeeze household budgets, with higher prices for groceries, gasoline and healthcare taking a particularly heavy toll on older Americans.
Social Security Commissioner Frank Bisignano said the adjustment would provide beneficiaries with “greater financial stability.”
But critics say the increase will still leave many retirees struggling to make ends meet.
“Most Social Security recipients believe the COLA increases don’t reflect their cost of living increases so they feel like they are falling behind,” Derek Reisfield, a media and technology executive and former chairman of MarketWatch, told The Post.
Reisfield said retirees tend to spend a disproportionate share of their income on essentials such as food, housing, transportation and healthcare — categories where rising prices can quickly eat away at the modest annual increases in their benefits.
“Clearly food and transportation costs are going up more rapidly, and health care and health insurance have been outpacing inflation dramatically, so retirees are losing ground despite the COLA,” Reisfield said.
“It largely depends on your spending profile,” he added.
The Trump administration is also preparing to end a temporary Medicare Part D subsidy program at the close of the year.
The Centers for Medicare & Medicaid Services, however, has projected only modest premium increases for most beneficiaries.
The frustration over rising living costs is widely shared.
A September AARP survey found that roughly three-quarters of Americans age 50 and older believed a projected 3.5% increase for 2027 would fall short of keeping up with inflation.
AARP CEO Myechia Minter-Jordan noted that one in five older Americans has no retirement savings, leaving millions especially dependent on their monthly government checks.
The larger benefits adjustment comes as Social Security faces a separate challenge: the prospect of running short of money to pay full benefits within the next decade.
According to the June 2026 trustees’ report, the program’s combined retirement and disability trust funds are projected to run short of reserves in 2034.
Without congressional action, incoming payroll taxes would be sufficient to cover only about 83% of scheduled benefits after that point.
Reisfield warned that the larger cost-of-living adjustment could further strain Social Security’s finances and hasten the depletion of its reserves.
“The day of reckoning is coming, and unless changes are made, benefit checks will eventually have to be cut,” he said.
The looming shortfall has fueled fresh debate in Washington over whether wealthier Americans should shoulder a greater share of the program’s costs.
Social Security is financed largely through payroll taxes, but earnings above a specified threshold are exempt.
That ceiling will climb to $192,300 in 2027, up from $184,500 this year.
Sens. Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio) proposed eliminating the cap in June, arguing that taxing earnings above the threshold would help preserve the program for future retirees.
The Peterson Foundation estimates that scrapping the limit could generate roughly $3 trillion in additional revenue over a decade.
The proposal faces political hurdles, particularly from Republicans who have traditionally resisted higher taxes on wealthy Americans.
Reisfield said potential fixes would likely include higher taxes on wealthy earners through raising or eliminating the payroll tax cap, pushing back retirement ages and reducing benefits for higher-income Americans — potentially by limiting their future cost-of-living increases.
“This won’t be easy or pleasant,” he said.
“But Congress and successive administrations have been kicking the can down the road for years.”
Meanwhile, recent changes under both parties have expanded financial assistance to retirees while adding pressure to Social Security’s finances.
A tax-and-spending package signed by President Trump created a temporary deduction for Americans 65 and older, although lower-income seniors who already owe no taxes on their Social Security benefits receive no additional benefit from the provision.
The deduction also excludes those who collect benefits before age 65 and people whose incomes exceed specified limits.
In early January of last year, then-President Joe Biden repealed two federal provisions that had reduced benefits for approximately 2.8 million Americans, many of them former public employees.
Despite the latest efforts to boost retirees’ finances, Congress has yet to approve a long-term solution to Social Security’s funding gap.
“The math is the math, you cannot change the answer through wishful thinking,” Reisfield said.
“The problem becomes harder to fix the longer we wait to do something.”
