The Senior Citizens League (TSCL), a nonpartisan advocacy group in the United States, has criticised the 3.6 per cent cost-of-living adjustment (COLA) announced for Social Security benefits in 2027, arguing that it may not be enough to help older Americans cope with rising living costs.
According to the report, the Social Security Administration (SSA) confirmed the adjustment on October 14, 2026, describing it as the largest since 2023, and it is scheduled to take effect on January 1, 2027.
However, the TSCL said the adjustment would fall short of the actual expenses faced by retirees, particularly as healthcare, prescription drugs, housing, and other essential costs continue to put pressure on household budgets.
The group also expressed concern that beneficiaries would have to absorb earlier price increases without receiving retroactive payments before the new adjustment takes effect.
The TSCL argued that the method used to calculate annual increases does not adequately reflect the spending patterns of older Americans. It said the SSA relies on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which it considers less representative of seniors’ expenses.
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According to the organisation, the index does not sufficiently account for the impact of rising healthcare costs, prescription medication and housing expenses on older people.
The group said its research had consistently shown that Social Security cost-of-living adjustments had failed to preserve beneficiaries’ purchasing power amid inflation.
Its 2026 Loss of Buying Power study estimated that Social Security benefits lost 13.7 per cent of their purchasing power between 2016 and 2026.
TSCL Executive Director Shannon Benton said, “Seniors do not experience inflation as a percentage on a chart. They experience it at the grocery store, at the pharmacy, in their insurance premiums and when they pay the rent. That is why the size of the COLA matters, but so does how accurately it reflects their real-world expenses.”
The TSCL has called for the adoption of the Consumer Price Index for the Elderly (CPI-E), which tracks the spending patterns of Americans aged 62 and above, as an alternative to the CPI-W.
It has also proposed that annual adjustments be based on the highest of three options: the CPI-W, the CPI-E, or a guaranteed minimum increase of three per cent.
However, changing the index used to calculate Social Security adjustments would require an act of Congress. Although legislative proposals have been introduced over the years, the reform has yet to be adopted.
The debate is further complicated by concerns about the programme’s long-term financial sustainability. According to the Social Security trustees’ 2026 report, the retirement trust fund is projected to deplete its reserves in the fourth quarter of 2032, after which incoming revenue would cover about 78 per cent of scheduled retirement benefits. The combined Social Security trust funds are projected to be depleted in 2034.
The prospect of higher benefit payments has fueled debate over how to protect retirees’ purchasing power while ensuring Social Security can continue meeting its obligations in the years ahead.
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