44% of Older Americans Rely Entirely on Social Security. Here's What the 2027 Cost-of-Living Adjustment (COLA) Means for Them.
Key Points
The monthly increase for most retirees will be between $35 and $150.
The average monthly benefit was recently just $2,089, or about $25,000 annually.
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Here's an eye-opening statistic: According to The Senior Citizens League's (TSCL) 2026 Senior Survey, fully 24.8 million older Americans -- roughly 44% of retirees -- are relying on Social Security as their only source of retirement income. That number is a lot higher than the 39% reported a year earlier.
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That saddens me, but it doesn't surprise me, because various reports have shown how little most Americans have socked away. For example, check out these numbers from the 2026 Retirement Confidence Survey:
|
Amount in Savings and Investments* |
Percentage of Workers |
|---|---|
|
Less than $1,000 |
22% |
|
$1,000 to $9,999 |
7% |
|
$10,000 to $24,999 |
7% |
|
$25,000 to $49,999 |
5% |
|
$50,000 to $99,999 |
11% |
|
$100,000 to $250,000 |
14% |
|
$250,000 or more |
35% |
Data source: 2026 Retirement Confidence Survey.
*excluding the value of a primary home
Fully 52% of respondents had less than $100,000 socked away, and you know many of them are older folks.
Social Security benefits get a boost
One wonderful thing about Social Security benefits is that they're inflation-adjusted via nearly annual cost-of-living adjustments (COLAs). The 2027 benefits increase has just been announced, and it's 3.6%.
It's likely not enough for many retirees (particularly because it has long been based on an inflation measure tied to typical workers' spending rather than seniors' spending), but any increase is helpful.
The average monthly retirement benefit (as of September) was $2,089 -- or about $25,000 annually. Applying the 3.6% bump to that yields an increase of roughly $75, bringing the new benefit to $2,164 (about $26,000 annually).
If you're retired, how much of an increase will you get? The table below, offering monthly and annual figures, might give you an idea:
|
2026 Monthly Benefit |
3.6% Increase |
2027 Monthly Benefit |
|---|---|---|
|
$1,000 |
$36 |
$1,036 |
|
$1,500 |
$54 |
$1,554 |
|
$2,000 |
$72 |
$2,072 |
|
$2,500 |
$90 |
$2,590 |
|
$3,000 |
$108 |
$3,108 |
|
$3,500 |
$126 |
$3,626 |
|
$4,000 |
$144 |
$4,144 |
Data source: Calculations by author.
|
2026 Annual Benefit |
3.6% Increase |
2027 Annual Benefit |
|---|---|---|
|
$12,000 |
$432 |
$12,432 |
|
$18,000 |
$648 |
$18,648 |
|
$24,000 |
$864 |
$24,864 |
|
$30,000 |
$1,080 |
$31,080 |
|
$36,000 |
$1,296 |
$37,296 |
|
$42,000 |
$1,512 |
$43,512 |
|
$48,000 |
$1,728 |
$49,728 |
Data source: Calculations by author.
Keep in mind
It's also worth noting that while Social Security benefits are rising, so are Medicare premiums, which will eat into the overall increase many were expecting.
Another, bigger problem is that the surplus that Social Security ran for many decades is now shrinking, and if Congress doesn't take action, it will run dry. That doesn't mean that benefits will fall to zero, as workers are still being taxed on their earnings, with that money being used to pay benefits. But that income won't be enough, so benefits may shrink by around 22%.
If this troubles you, contact your members of Congress to let them know what you think about this situation. And know that there are multiple ways to fix Social Security -- such as taxing all of workers' earnings.
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