Wisconsin Retirees See Social Security Boost in 2027
But will inflation leave them with less in real dollars?
A 2011 photo shows an exhibit at the Franklin D. Roosevelt Presidential Library & Museum that commemorated the 75th anniversary of the signing of the Social Security Act in August 2010. (FDR Presidential Library & Museum | via Flickr, CC BY 2.0)
Wisconsin retirees will see higher monthly Social Security payments next year.
The cost-of-living adjustment (COLA) for 2027 is 3.6 percent, or roughly $75 per month on average. It’s the largest increase since 2023.
But the program’s cost-of-living adjustment may not keep up with higher costs for food, gas, housing and other items due to inflation.
The latest Consumer Price Index data shows the costs of goods in September rose 3.7 percent compared to the same time last year.
The COLA is intended to keep pace with inflation as costs rise. But it can sometimes lag because it’s calculated from prices earlier in the year, said Devon Christianson, director of Brown County’s Aging and Disability Resource Center, on WPR’s “Wisconsin Today.”
“(COLA) doesn’t equate to financial security,” she said. “In our area and in many parts around the state, we see housing costs are rising much higher, food costs, medical expenses, transportation programs, utilities, all those add up together to create incredible pressures where older adults have to make choices that are less than favorable.”
Social Security bases its COLA on consumer price data. But according to Lindsay Jacobs, assistant professor at the La Follette School of Public Affairs, the costs for retirees don’t always line up with those calculations.
While some Americans have other sources of income in retirement like a pension or 401(k), other retirees can have very little to fall back on outside of their monthly Social Security benefits. Christianson said that challenge can make some people stay in the workforce longer or come out of retirement for extra income.
“People are making choices that are really difficult,” Christianson said. “They’re not about whether to have another cellphone; they’re about whether they’re going to be able to afford food that week because their medical expenses have increased.”
Medicare premiums are also likely to rise next year, Jacobs said. And that added cost could eat into any increase from Social Security adjustments.
Jacobs said the average Social Security check is about $2,100 a month before next year’s increase.
The long-term financial strength of the program is also a concern. The Congressional Budget Office projects that the trust fund paying retirement benefits could run out of funds to meet its current obligations by 2032 without action by Congress. Jacobs said people could see their benefits cut by at least 20 percent if nothing changes.
“We’re already taking in less than is going out in benefits,” Jacobs said. “The goal is to avert this very sudden drop for the 80 million beneficiaries that we’ll have.”
Christianson said people looking for assistance should check the Department of Health Services’ ADRC list to see which program covers their region of the state.
Jacobs said local ADRCs can work with older adults to help them find ways they can lower their expenses for costs like healthcare and housing.
Wisconsin retirees see Social Security boost in 2027, but inflation hikes costs was originally published by Wisconsin Public Radio.
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