The U.S. Social Security Administration projected on Wednesday that the annual cost-of-living adjustments for seniors and people with disabilities would start to increase by 3.6% in 2027. However, some recipients complain that this increase is not sufficient to offset the soaring prices.

This adjustment means that nearly 72 million people who receive monthly social security benefits, as well as about 7.3 million people who receive supplementary security income ( Supplemental Security Income ), will be able to earn an additional $75 per month.

At the time of this announcement, inflation is putting pressure on household budgets and businesses, and there are only a few weeks left until the mid-term elections.

The adjustment of living costs for retirees and disabled beneficiaries, namely COLA, is funded by the payroll taxes paid by employees and their employers, but there is a certain annual wage cap on the amount that can be levied. This cap will increase to $192,300 in 2027, up from $184,500 in 2026.

The director of the institution, Frank Bisignano, stated in a statement that this adjustment will bring “greater financial stability” to the recipients.

The elderly feel the pressure of rising costs.

Some elderly people believe that this increase is merely a drop in the bucket, as inflation has already eroded their monthly savings. The U.S. government reported on Wednesday that inflation accelerated in September, with the Consumer Price Index rising by 3.7% compared to the same period last year; gasoline prices also soared after renewed conflicts between the United States and Iran.

The chairman of the social security advocacy organization Social Security Works, Nancy Altman, stated that the latest inflation data indicates that "although social security COLA is very important, it still cannot keep up with rising prices."

71-year-old Lorrie Ufkin lives just outside Rochester, Minnesota. She says that this time, COLA will not have a significant impact on her medical expenses. The Trump administration will end a temporary Medicare Part D subsidy program at the end of the year, which previously helped offset her insurance premiums. Ufkin indicates that both her insurance premiums and medication costs are expected to rise, although the Centers for Medicare & Medicaid Services (CMS) predicts that for most people, the increase will be more modest.

She told The Associated Press, " COLA can't even keep up with the adjustments they made to Medicare."

She said that the monthly cost of a medication she and her husband take would increase from $11 to $200 per prescription, as a result of changes made by the Republican government to the healthcare program for the elderly. She described this as "catastrophic."

Organizations for the rights of the elderly state that COLA once again remind people that many elderly individuals are in a very strained financial situation.

AARP Chief Executive Officer Dr. Myechia Minter - Jordan states: "Currently, elderly Americans are under significant financial pressure – one-fifth of them do not have retirement savings, and more people feel financially insecure this year than last year. This makes it crucial to adjust the cost of living for social security benefits."

68-year-old Jaime Jakubczak lives in Buffalo, New York. He retired early at the age of 55 and recently returned to work to maintain his financial balance, especially to cover the rising property taxes. He says that this time the income is not enough, as it is offset by high inflation and the proposed 3.9% increase in property taxes in his town.

According to Jakubczak, considering the significant increases in food, medical, and gasoline prices across the country, a 3.6% adjustment to living costs is "just a drop in the bucket."

He said, "Originally, we could have caught up a bit with the COLA based on inflation, but the inflation is just too high, and it overpowers our COLA subsidies."

According to a survey from September conducted by AARP, the majority of elderly people believe that COLA has not kept up with inflation sufficiently. The survey found that approximately three-quarters of respondents aged 50 and above disagreed with the statement that "a COLA of 3.5% in 2027 is sufficient to keep up with rising prices."

Social security faces an imminent funding gap

If the funding gap is not resolved, the U.S. Social Security Administration is facing an imminent date of bankruptcy.

In June 2026, a report from the Social Security and Medical Insurance Trustees stated that the combined trust fund for social security, which covers pension and disability beneficiaries, will be unable to pay the full benefits starting from 2034. After that, incoming revenues will only be able to cover about 83% of the planned benefits.

Although a permanent solution has not yet been adopted to consolidate this welfare program, members of Congress have called for new measures to replenish the trust fund.

Massachusetts Democratic Senator Elizabeth Warren and Ohio Republican Senator Bernie Moreno proposed in June to eliminate the cap on the social security payroll tax, which is the maximum rate of taxation on income. In an article for The New York Times, they argued that treating all income equally "would generate considerable revenue and enable social security to remain solvent for another generation."

This approach is quite controversial, as the Republican Party has always been critical of raising taxes on the wealthy.

Peterson Foundation It is estimated that abolishing the wage tax cap will add approximately $3 trillion in funds to this project over the next 10 years.

Both the Trump and Biden administrations signed new retirement benefits bills, which improved the financial situation of retirees, but at the same time, they also accelerated the insolvency of pension benefit programs.

As part of the Republican Party's tax and spending bill, the Trump administration provided a temporary tax reduction for individuals aged 65 and above, applicable to all incomes, not just social security income. However, those who are not eligible for this reduction include: low-income seniors who do not need to pay taxes on social security in the first place, those who receive benefits before the age of 65, and those whose incomes exceed the established threshold.

In addition, the Democratic President of the United States, Joe Biden, abolished two federal policies in 2024 – Windfall Elimination Provision and Government Pension Offset – which previously restricted social security benefits for approximately 2.8 million people, mainly former public sector employees.