Social Security payments to increase — slightly

The Social Security Administration is set to announce next year’s cost of living adjustment (COLA) tomorrow morning. In an attempt to help seniors cope with inflation, the SSA is expected to give retirees a bit more in their checks each month.

“Marketplace Morning Report” host Kimberly Adams spoke with Marketplace reporter Nancy Marshall-Genzer about the changes. The following is an edited transcript of their conversation.

Kimberly Adams: Do we have an idea of how much of a Social Security bump seniors can expect?

Nancy Marshall-Genzer: We do. AARP is predicting an increase of 3.6% in 2027, and that would take effect this January. Now, the consumer price index increased 3.4% in August, so Social Security would just barely be keeping up with inflation. Of course, we're scheduled to get the CPI for September tomorrow morning. The Social Security COLA for 2027 is expected to be released right around the same time.

Adams: If there is a 3.6% increase, how much more would seniors actually get per month?

Marshall-Genzer: Well, AARP says it would work out to $75 more a month for the average retiree, who currently gets just slightly more than $2,000 a month from Social Security. Now keep in mind Kimberly, the Senior Citizens League, a nonprofit that advocates for seniors, they say the cost of living for the average senior is about $2,700 a month.

Adams: That math doesn't quite add up. So, how are seniors keeping up with rising prices?

Marshall-Genzer: They're really not, Kimberly. In a survey by the Nationwide Retirement Institute, 74% of current Social Security beneficiaries said they've made financial changes because their Social Security checks were not keeping up with rising prices. More than half said they've cut discretionary spending, things like travel and eating out, 38% said they've reduced spending on essentials, including groceries and medications. And a quarter of the seniors in the survey said they're relying more on their savings to make ends meet.