Social Security Faces 22 Percent Benefit Cuts in 2032 Unless Congress Acts

The Social Security Administration has announced a 3.6 percent cost-of-living-adjustment, or COLA, for 2027 — the greatest increase in four years. For the average retiree, that will mean $73 more per month and about $880 more per year, bringing the average retiree’s benefit to approximately $25,300 next calendar year. But a cost-of-insolvency adjustment is on the horizon if Congress refuses to fix Social Security.

Automatic COLAs have been the norm for more than 50 years. But when Social Security’s retirement trust fund runs out of money, as it surely will soon, these annual benefit increases will turn into automatic benefit reductions — unless younger generations are forced to pay about 40 percent more in Social Security taxes.

About the Author

Rachel Greszler

Rachel Greszler is a Senior Fellow in Economics and Workforce in the Plymouth Institute for Free Enterprise at Advancing American Freedom.

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The Social Security Administration has announced a 3.6 percent cost-of-living-adjustment, or COLA, for 2027 — the greatest increase in four years. For the average retiree, that will mean $73 more per month and about $880 more per year, bringing the average retiree’s benefit to approximately $25,300 next calendar year. But a cost-of-insolvency adjustment is on the horizon if Congress refuses to fix Social Security.

Automatic COLAs have been the norm for more than 50 years. But when Social Security’s retirement trust fund runs out of money, as it surely will soon, these annual benefit increases will turn into automatic benefit reductions — unless younger generations are forced to pay about 40 percent more in Social Security taxes.