Social Security's 2027 COLA Set at 3.6%
The Social Security Administration has announced that beneficiaries will see their payments increase by 3.6% in January of the following year, marking a rise from an average monthly benefit of $2,033 to approximately $2,108. This adjustment reflects inflation over the past twelve months and is the largest cost-of-living adjustment (COLA) since 2022's 8.7%. The COLA is based on the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which may not fully capture rising healthcare costs faced by retirees, as tracked in a separate index called CPI-E. To maximize their returns beyond this increase, beneficiaries are advised to consider high-yield savings accounts or money market funds. Online banks such as SoFi Technologies offer up to 4.2%, Go2bank offers up to 4.5% on the first $5,000, and Axos ONE provides new customers with a rate of up to 5%. These options typically outperform traditional brick-and-mortar bank savings accounts in terms of yield while maintaining liquidity. Retirees are encouraged to review account details carefully due to potential delays in accessing funds. Despite these minor inconveniences, the higher yields can significantly boost annual cash flow during a period where maximizing returns is crucial.
Topics: cost of living adjustment (COLA) inflation retirement social security
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