[00:00:00] Speaker A: Well, American seniors are getting a raise next year in 2027, at least those who are Social Security recipients. The cost of living adjustment has officially been announced for the new year. And joining me here now to talk about that is Bill Sweeney, senior vice president of Government affairs for aarp. Bill, thanks so much for being here. Really appreciate your time.
[00:00:20] Speaker B: Thanks, Matt. Good to be here.
[00:00:22] Speaker A: It's great to have you. And I know that, you know, it's a bit of a good news, bad news kind of a situation anytime we get a COLA announcement because, yeah, you do get a raise, but you get a raise because there has been inflation in this current year. Right. I mean, what give us, give us kind of the top line here. How much are seniors going to see in their checks as far as an increase goes in that benefit amount next year?
[00:00:43] Speaker B: Well, the 2027 cost of living adjustment, the COLA, is 2 point is, I'm sorry, 3.6%.
And that is for the average person on Social Security, it's going to be about $75 a month or $900 a year. And as you mentioned, it's not, you know, sort of extra money. It is they're really designed it's based on the inflation rate that happened over the course of the last year, and it's designed to help you keep up with those higher prices. And so it isn't most people are not going to sort of feel like they've got a lot of extra spending money. It's going to be just barely keeping you up with the cost of rising groceries, rising gas prices, electric rates and all the things that people are struggling with right now.
[00:01:26] Speaker A: Yeah. And it's interesting, too, because the way that the Social Security Administration sort of bases the calculation of COLA adjustment each year is based on a particular measure of inflation, the cpi, the Consumer Price Index for it's like urban wage earners and clerical workers, I believe is the full name of it.
You'll notice it's not the CPI for American Seniors or anything like that. I mean, that seniors have sort of different needs as far as their costs. Right. And so what you talked about is kind of barely keeping up. How are seniors sort of dealing with the inflation, the rising costs and all of that these days?
Because as I see their, you know, costs and expenses do differ.
[00:02:16] Speaker B: Well, they sure do. And when we ask people what it would, you know, whether this COLA would be enough to keep up with the rising prices, 76% of them said, no, this wouldn't be nearly enough. And when we said, well, how much would be enough? The Vast majority of people, more than 70% of people said a COLA of 5 to 8% is really what they would have needed to keep up with rising prices. And, you know, Medicare premiums are going to come out next month.
A lot of people are going to see those eat up a big chunk of their Social Security COLA as well. So it is a really mixed story and it's a really tough time to try to figure out how to make, make ends meet with all the prices of everything going up, but especially healthcare, drug prices. All of that is a, is a huge driver of high cost for seniors.
[00:03:05] Speaker A: Right. And you sort of couple that with this sort of longer term outlook for Social Security and that seniors don't find a lot of comfort there after say 2032 or so when the trust fund is slated to basically go insolvent. Now that, as we've talked about before, that doesn't mean that benefits would then go away. But just, just clarify here. Seniors could see a drastic reduction in their checks from month to month if that were to happen.
[00:03:34] Speaker B: Well, 2032 is a hard deadline that needs to get, that Congress needs to get acting on right away.
I think it's important to note that that is six years away and that we have an election coming up in November that people get elected to the United States Senate who serve six year terms.
They will be in office at the end of their term. They will need to decide what to do with Social Security. So this is becoming very real now from an electoral point of view and from a voter point of view. This is the time to really be focused on it. If you weren't focused on it before, but the truth is Social Security can pay about 80% of benefits kind of indefinitely at this point. The issue that Congress needs to fix is about that 20% shortfall that would happen in 2032 if they don't act.
The good news is Social Security's been around for 91 years. That's never happened. We've come close in the 70s and the 80s. Congress has never let that happen. I believe that Congress won't let it happen because there's gonna be a lot on the line for them if they were to do something like that to so many retired Americans and to the 185 million of us who are paying into Social Security right now. And we expect to get the benefits that we have earned. And so I think as voters go to the ballot boxes and start raising their voices about this, I think that can help clarify things for members of Congress who, who need to be Thinking about this a little bit more urgently than maybe they have in the past.
[00:04:54] Speaker A: Yeah. If nothing lights a fire under someone on Capitol Hill, I feel like then electoral consequences. So we'll see, we'll see how that goes.
But yeah, I think I kind of tend to agree with that, that that will light a fire under them as well.
Now for folks who needs, you know, maybe some more information about Social Security, about, you know, how to sign up and all of that, I mean there are, there are resources online.
There are things that they can also do in person at local Social Security offices, those that were not closed due to budget cuts the past couple of years.
But what can people do? What kind of information is available for folks who are maybe pre retirees who are trying to get a better idea of what their benefit amount is going to look like when they do retire?
[00:05:46] Speaker B: Well, I encourage Everybody, whether you're 18 or 50 or older to sign up for a Social Security account. Go to the SSA.gov the Social Security Administration website. Sign up for a my Social Security account. Anybody can do it.
And not only can you see all the information about every job you've had shows my first job when I was 16 working at McDonald's, that that money is there. It shows up on the, the, on the list of jobs that I've had. It tells you how much you can get if you claimed at 62 or 67 or 70.
But it also allows you to do stuff that you used to have to take a half day off of work to stand in line at an office to do. So you can get a new if you lose your Social Security card. Lots of people do that. You can go to the website and request a new one from the comfort of your own home. There's lots of the things that you used to have to go to an office to do, you can actually do now on the website. So we really encourage people to do that.
Save the visit to the Social Security Administration for when you have a really complicated problem. Deal with some of these easier ones at home online.
[00:06:50] Speaker A: Very good. And I'm sure also that there are a lot of
[email protected] I would imagine for folks as well.
[00:06:57] Speaker B: We have a tremendous amount of
[email protected] SocialSecurity where you can get all kinds of information about when to claim and what it means and what you should be thinking about as you make that tough decision.
As well as arp.orgcola where you can get involved in the fight to save the COLA to protect this cost of living adjustment. Make sure that Congress hears from you and understands the importance of this as we go forward.
[00:07:22] Speaker A: Yeah. Vitally important for American retirees. Well, Bill Sweeney, senior vice president of government affairs for aarp, thank you so much once again for being here. Really do appreciate your time.
[00:07:31] Speaker B: Thank you, Matt. I appreciate you.
