The letter will come in December. It always does.
Social Security announced the number on October 14. Checks rise 3.6% in January, the largest bump in five years. More than 76 million people get the raise.
For the typical retiree, that is roughly $2,088 a month going to about $2,163. Nice to see. Easy to spend twice.
The raise itself runs on a formula. The rules around it do not. Congress writes those, and Election Day is one week from today.
Taxes, spending and retirement accounts are all on the table in Washington. A lot of people my age would like a plan before the results come in. One firm wrote a guide for exactly that week.
Back to the raise. Here is the part the December letter will not explain.
The 3.6% is not built from a retiree’s budget. It is built from someone else’s.
What the check gets
A 3.6% raise for 2027. It is set by a fixed formula: average prices for July through September, against the same months a year earlier.
What the yardstick measures
The formula uses CPI-W, a price index for working households. The Senior Citizens League says it misses what retirees actually pay for, and wants a retiree index instead.
So the raise follows prices for people who commute and buy work boots. Ours run through rent, repairs and the pharmacy counter.
That gap is the story of the next aisle. And somebody already priced it in.
Where the cohort’s money sits this quarter, and where the January raise goes.
The honest catch is the ceiling. A tenant on a fixed check can only absorb so much. Federally subsidized senior housing caps rent at 30% of income by design. Push too hard anywhere else and the apartment sits empty.
Still, it is worth knowing who reads your raise before you do.
Another rule changed this year with far less fanfare. For 25 years, you needed $25,000 in an account to day trade. Regulators approved scrapping that minimum in April. The new floor is $2,000, once your broker switches over.
I am not about to start day trading at 64. But plenty of people with small accounts are taking a second look, and one trader thinks it changes the game.
The arithmetic
2027 cost-of-living adjustment of 3.6%, the largest in five years, announced October 14, 2026, for more than 76 million people; based on CPI-W for July through September: Social Security Administration, as reported by NAPA, October 2026. Average retirement benefit of about $2,088 rising to about $2,163, roughly $75 a month: The Senior Citizens League estimate, via NAPA. Senior Citizens League position that CPI-W misses retiree expenses and its call for a retiree index (CPI-E): same source. SEC approval on April 14, 2026, of FINRA rules replacing the $25,000 pattern day trader minimum with a $2,000 threshold, effective June 4, 2026, with brokers given until October 20, 2027, to implement: Charles Schwab. Rent in HUD-subsidized housing generally set at 30% of adjusted income: U.S. Department of Housing and Urban Development. Election Day: November 3, 2026, one week after this edition.
Your own 2027 number shows up in your online Social Security account in December. When it does, set it next to your rent or HOA letter. Subtract one from the other. That is the raise you actually keep.
Andrew
Boomers Trade is written by someone getting older right alongside you, and watching who profits from it.
|