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Concern over potential Social Security benefit cuts
LiveNOW’s Andy Mac is speaking with Zach Cohen, Bloomberg Government's senior budget reporter, as the clock continues to tick for American workers and seniors who are worried about cuts to their Social Security. According to Fox Business, the Social Security Administration’s 2026 Trustees Report confirms that the federal retirement safety net is less than seven years away from fiscal depletion. Experts are saying that the Old-Age and Survivors Insurance (OASI) trust fund will completely exhaust its accumulated reserves in the fourth quarter of 2032.
Social Security recipients are projected to get a bigger cost-of-living increase next year to counter a rise in inflation.
The official cost-of-living adjustment for Social Security recipients won’t be announced until mid-October, but The Senior Citizens League, a nonprofit that advocates for seniors, releases its own projections each month.
Social Security COLA 2027
By the numbers:
TSCL predicts that Social Security’s 2027 cost-of-living adjustment will be 3.8%, up 1 percentage point from last year’s 2.8%. It would rank 17th among the COLAs issued since 1977.
According to TSCL, if the increase took effect today, average monthly benefits would rise by $73.62, from $1,937.53 to $2,011.15.
How is COLA calculated?
The backstory:
The Social Security Administration adjusts monthly benefits every year to reflect increases in inflation. If there’s higher inflation, the monthly benefit is higher as well.
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The 2027 COLA is calculated by taking the average inflation, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), for July, August and September 2026. TSCL’s estimates are based on the Consumer Price Index, the Federal Reserve interest rate and the national unemployment rate.
Funding Social Security
Dig deeper:
Social Security’s retirement trust fund will face a funding shortfall in 2032, a year earlier than last year’s projections.
If Congress doesn’t act, the "go-broke" date would trigger an automatic 17% cut to benefits.
What they're saying:
AARP’s CEO Myechia Minter-Jordan has said that the numbers "should be a wake-up call. Congress needs to act."
"The reality is that poverty is increasing rapidly among American seniors, who make up the fastest-growing portion of the homeless population," TSCL Executive Director Shannon Benton said.
RELATED: Social Security launches new online tools for disability claims
"Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire," Minter-Jordan said in a statement. "No family should see any cuts to what they’ve earned in Social Security. "
Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67.
Rep. John Larson, a Connecticut Democrat, introduced a bill that would raise benefits by 2%, set the new minimum benefit to 125 percent of the federal poverty line and change the COLA calculation to the CPI for the Elderly (CPI-E), according to TSCL. It would be funded by an increase in the Social Security payroll tax, and expanding the tax to cover income over $400,000. Govtrack gives it a 0% chance of passing.
The Source: This article includes information from The Senior Citizens League, Govtrack, The Associated Press, and previous FOX Local reporting.