Overview
- The Social Security Trustees’ June 2026 report projects the retirement trust fund will exhaust reserves in the fourth quarter of 2032 and that incoming revenue would then cover about 78% of scheduled retirement benefits.
- The Committee for a Responsible Federal Budget has floated limiting or eliminating full COLAs for high‑income beneficiaries in a white paper that relies on Urban Institute modeling, but the idea remains a proposal and is not law.
- Analysts expect the 2027 COLA to be in the mid‑3% range and AARP estimates about 3.5%, with the Social Security Administration set to announce the official adjustment in October after September’s CPI‑W data.
- Cutting or changing COLAs would slow benefit growth for affected retirees and could shrink their long‑term purchasing power because each future raise would be calculated from a lower base and Medicare Part B premiums are typically deducted from checks.
- Models from the SSA and outside groups show different fixes—reducing COLAs by 0.5–1 percentage point, switching to a chained index, raising the full retirement age, or raising revenue like removing the payroll tax cap—have very different distributional effects and would require congressional action.