Seniors Set For A Social Security Raise To Combat Rising Inflation

Social Security is upping monthly payments by $75 to counter inflation.

About 7.3 million seniors will see increased payments starting in December, and over 72 million Social Security beneficiaries will see the $75 monthly adjustment starting in January 2027, the administration announced on Wednesday.

“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability,” said Social Security Commissioner Frank J. Bisignano. “Under President Donald J. Trump, Social Security is delivering better, faster, higher-quality service for the American people.”

The agency noted that the cost-of-living adjustment will be 3.6%, the largest adjustment in four years. However, inflation has risen 14% since January 2022, according to the Bureau of Labor Statistics. Over the same period, the S&P 500 has gained nearly 80%.

Over the past 20 years, several lawmakers have called to privatize Social Security and allow workers to elect to invest a portion or all of their Social Security payments into private investment accounts. The program is destined for insolvency, with payments set to outpace growth.

Former House Speaker Paul Ryan (R-WI) called for allowing workers under 55 to invest one-third of their Social Security taxes in personal retirement accounts. Former President George W. Bush also proposed private accounts in his 2005 State of the Union address.

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Trump supported partial privatization before becoming president, writing in his 2000 book, “The America We Deserve,” that “privatization would be good for all of us.” As president, Trump has emphasized protecting Social Security.

Last year, Treasury Secretary Scott Bessent said that Trump Accounts, the administration’s investment accounts for children, could be a “a back door for privatizing Social Security,” pointing to their potential to build substantial retirement savings.

Currently, Social Security is funded primarily through payroll taxes. Employees and employers each contribute 6.2% of workers’ wages, up to an annual earnings limit. Surplus funds are invested in special-issue U.S. Treasury securities.

The Social Security Administration predicts that Social Security won’t be able to make its payments beginning in the fourth quarter of 2032, forcing it to cut its checks by more than 20%. 

“At that time, the fund’s reserves will become depleted and continuing program income will be sufficient to pay 78 percent of total scheduled benefits,” the agency said. 

A recent AARP survey found that 71% of adults over 50 say a Social Security increase between 5% and 8% would be sufficient to help them afford everyday expenses.

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