Social Security's Supercharged, Trump Bump-Driven 2027 COLA May Hasten the Timeline to Sweeping Benefit Cuts
Outsize Social Security raises come with potentially serious consequences for America’s leading retirement program.
Overview
For the nearly 55 million retired workers who receive a monthly Social Security benefit, there are few, if any, annual announcements more anticipated than the program's cost-of-living adjustment (COLA).
Social Security's COLA is effectively a "raise" given to beneficiaries that's designed to offset the effects of inflation and ensure that Social Security income doesn't lose buying power over time. Hypothetically, if a large basket of goods and services regularly purchased by retirees were to increase in cost by 3% from the previous year, Social Security payouts would need to climb by a commensurate amount; otherwise, retirees wouldn't be able to purchase the same amount of those goods and services the following year.
Details
Social Security's 2027 COLA is shaping up to be a mixed bag. On the one hand, President Donald Trump's policies are likely to supercharge next year's raise -- and who doesn't like a beefier monthly payout? However, this Trump bump-driven 2027 COLA comes with a serious unintended consequence that may be detrimental to existing and future beneficiaries.
Source
Originally published at www.fool.com.