Jenna Romaine at U.S. News wrote about the projected 3.9% Social Security cost-of-living adjustment for 2027, which some outlets were calling the Trump Bump. Last year's COLA was 2.8%, about $56 a month for the average beneficiary, and the official number comes in October after third-quarter inflation data.
A higher COLA sounds like a win, and for many clients it is, but it is not that simple. The projected 2027 COLA is almost certainly driven by tariff-induced price pressure trickling through consumer goods. Is the administration's policy the proximate cause? Partly. Import tariffs raise consumer prices, and that feeds directly into the CPI-W calculation that sets the adjustment.
But calling it a Trump Bump implies it is a favor, when it is really inflation wearing a bow. In reality, a larger Social Security COLA means retirees are paying more for things, and Social Security is playing catch-up, not getting ahead. The check is bigger because the grocery bill got bigger first, and the adjustment arrives a year after the prices did.
There is a second-order effect worth watching too. A larger benefit can push more of it into taxable territory and, combined with other income, nudge a retiree closer to a Medicare surcharge threshold. Bigger checks are welcome. They are not a raise, and the planning should not treat them like one.
Read the full article at US News & World Report →
