A prominent seniors’ advocacy group predicted on April 10 that next year’s Social Security payments will likely increase by 2.8 percent under the annual cost-of-living adjustment (COLA), as the inflation metric rose 0.9 percent month over month.
In a news release, The Senior Citizens League (TSCL) said the forecasted COLA for 2027 would be the same as the adjustment implemented for 2026’s payments. The average benefits for retired workers would increase by $56.69, or from $2,024.77 to $2,081.46, it added.
“Americans are right to worry about our current COLA projection. The fact is that most senior households already get by on only about 58 percent as much income as their working-age counterparts, and you’d be hard-pressed to find a middle-class or working-class American who thinks the economy is doing well right now, especially as oil prices rise,” TSCL Executive Director Shannon Benton said in a statement.
“Reforming Social Security needs to follow a two-pronged approach, strengthening revenues and benefits at the same time to ensure prosperity for all Americans, of all ages,” she added.
Previously, the seniors group has advocated switching the COLA from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Consumer Price Index for Americans aged 62 and older (CPI-E).
The Social Security Administration announces the COLA for the next year in October, based on CPI-W data for July, August, and September. The COLA also applies to Supplemental Security Income, or SSI, payments.
The forecast came on the heels of the Department of Labor’s monthly report that found that consumer prices rose 3.3 percent in March from a year earlier. That’s up from the 2.4 percent reported in February. On a monthly basis, prices rose 0.9 percent in March from February, the largest such increase in nearly four years.
But excluding volatile food and energy, core prices rose 2.6 percent in March from a year earlier, up slightly from 2.5 percent in February. And last month, core prices rose a modest 0.2 percent, suggesting that rising gas prices haven’t yet spread to many other categories.
Since the start of the U.S.–Israeli war with Iran in late February, the narrow Strait of Hormuz waterway that carries roughly a fifth of the world’s oil on a normal day has effectively been shut down. That has sent oil and gas prices surging, with the American Automobile Association reporting on April 10 that the price of a regular gallon of gasoline increased to $4.15 nationwide, up from $2.98 on the day before the war started.
Inflation reached a peak of 9 percent in June 2022, as COVID-19 snarled supply chains and several rounds of stimulus checks pushed up consumer demand. Prices soared for groceries, furniture, restaurant meals, and many other goods and services.
As a result, the COLA for Social Security payments rose to 8.7 percent for 2023, which was considered the largest increase in more than 40 years.
The Associated Press contributed to this report.
