Social security benefits rising 3.6% in 2027

Well, seniors will enjoy this. They're going to get a much larger than usual boost in their Social Security payments next year. Not much, but quite a bit here if you think about it. The cost of living adjustment will be 3.6%, and that's the highest cost of living increase we've seen since 2023. Let's bring in our political editor, Craig Patrick, with the good news here to put that into context. Hi there, Craig. Is this increase enough for seniors to keep pace with inflation, though? I guess that's the real answer. It is, and we don't have an answer to that because we don't know what inflation is going to be. The bottom line is, presently, unfortunately, it's not enough to keep pace with inflation with CPI inflation coming in at 3.7 percent today and this adjustment 3.6 percent mathematically that is not keeping up with inflation but let's see where things go in terms of the average increase it will vary from person to person but you're looking at around 75 dollars per month extra and then of course on top of that not all but many, 21 million people, also got a Part B premium rebate of $90 as well. That's the good news. The not-so-good news is that kind of gets washed out because you have a projected Part B increase of around $6.66 a month. And keep in mind, your Medicare Part B for seniors, the premium is deducted from the benefits. And you're looking at, in addition to Part B, you have Part D the drug benefits which will vary depending on the plan but generally you're looking at an extra 50 a month or more of course you're entering a period where that can be negotiated depending on the plan that you pick and keep in mind we're already seeing a poverty rate among senior citizens of 15.4 percent at the last point that that was measured that was the highest among all the age demographics and up from 12 percent just six years ago so even though there is a boost a lot of seniors are still feeling very very squeezed yeah no doubt about it well uh the news was exciting for a second but then reality strikes we appreciate the clarification there how does the government then determine what the cost of living adjustment will actually be well they always do it the same they take the average CPI-W that would be the rate of inflation among urban urban consumers and clerical workers they're going to average that for july august and september you get an average there and that's a projection basically for what it will be next year but you see here it's underweighted for health care costs and keep in mind that that accounts for around 14 percent statistically of all senior spending as well it does not measure in other words the level of health care inflation that many seniors will face that's why it's merely an estimate and when inflation continues to accelerate let's hope it doesn't but if it continues to go in that direction that's where you'd be losing ground if it does go down on the other hand that's where you gain sure when will social security recipients start getting this extra money and when will they find out exactly how much it's going to be well they'll find out by notification by mail and by email digitally in december of this year what their exact number is going to be and they'll start receiving those extra payments in january and what about that social security trust fund what's the status there and uh is that on pace still to run out of money unfortunately it is without congressional action the retirement fund would would hit a shortfall in 2032 and then you have retirement and disability funds that that would be projected to run dry by 2034 and with no action you would then be looking at an across the board cut of 22 percent in benefits by the year 2032 that's just what six plus years from now which means something's going to have to give Yeah, that's an amazing number. 22% would be terrible. Here, is the administration raising the tax cap on payroll to help try to fund Social Security here? Yes, and that's figured in the same general formula. The cap was earnings of $184,500. That just went up slightly to $192,300. But statistically, very few, comparatively very few people make that kind of money. Yeah, all right. I know you'll keep watching it for us. Craig Patrick with us as always. Thanks. Thank you.