AARP Reacts to Social Security 2027 COLA Announcement

WASHINGTON – Today, AARP Chief Executive Officer Myechia Minter-Jordan released the following statement in response to the announcement of a 3.6%  Social Security cost-of-living adjustment (COLA), which for the average Social Security recipient means an additional $900 per year. Key survey trends tied to the COLA follow.

 
“There’s a lot on the line financially right now for older Americans: one in five have no retirement savings, and more people feel financially insecure this year than last. That makes Social Security’s cost-of-living adjustment (COLA) critically important. It helps millions of Americans keep up with rising costs for groceries, routine bills, health care and other everyday expenses.  
 
Yet special interests in Washington still want to weaken or eliminate the COLA, which would amount to cutting tens of thousands of dollars for middle-class seniors. We will not let that happen. 
 
AARP fought for the creation of the COLA in 1972 and has defended it ever since. Without it, millions more older Americans would be living in poverty. That’s why we are fighting every day to protect and strengthen Social Security for generations to come. Americans cannot afford cuts to the benefits they have earned – whether through changes to their hard-earned payments or the COLA.” 

AARP CEO Dr. Myechia Minter-Jordan 
 

To mark the announcement, AARP conducted a new survey examining views from people across the country on the COLA. Key findings include:

• Most adults age 50-plus say a 3.5% COLA in 2027 does not seem like it is keeping up with rising prices. More than three-quarters disagree that the increase would be enough (76%), and only 23% say it keeps up.

• Attitudes toward the COLA have remained consistent in recent years. In each of AARP’s past three surveys, more than three-quarters of adults age 50-plus said the projected COLA would not be sufficient to keep up with rising prices (83% in 2024, 77% in 2025, and 76% in 2026).

Earlier this week, AARP’s Public Policy Institute released new analysis showing how proposals to change the COLA to an alternate measure of inflation would significantly reduce lifetime benefits. The analysis found:

• Changing the COLA calculation to what's called a "chained CPI” would mean a reduction in benefits that would compound over time, resulting in benefits 3.7% lower at age 75 and 9.2% lower at age 95 for a beneficiary claiming Social Security at age 62.

• This change would mean a loss of approximately $17,500 for the average male retired worker and $13,400 for the average female retired worker who retired in 2001.

• AARP has previously fought against such a change successfully. 

Even a modest reduction today in overall Social Security benefits could have significant consequences for Americans' financial security, health, and overall well-being. The AARP survey released this week found:

• About one-third of adults 50-plus might use savings faster (36%) or save less (32%).

• People who are highly reliant on Social Security would be more likely to cut health services (41%) or delay medical care (25%).

• More than one in five people reliant on Social Security (22%) would provide less financial help to family, and nearly as many highly reliant recipients would visit family less often (19%).

Social Security is the only inflation-protected source of income for most seniors in retirement, and AARP has long fought to protect the COLA and ensure that retirees get the full value of the benefits that they've earned throughout their careers. 
 

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