Social Security: How To Protect Your Budget Now Ahead of a Potentially Tiny 2027 COLA Increase
Written by
Josephine Nesbit
Edited by
Jenna Klaverweiden
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A cost-of-living adjustment, or COLA, is meant to help Social Security benefits keep pace with inflation. But even with modest increases, retirees may still feel the squeeze.
In 2026, a 2.8% COLA increased the average monthly retirement check by $56, affecting over 75 million Americans, according to the Social Security Administration (SSA). Early estimates suggest 2027 may bring a similarly small adjustment. If the Senior Citizens League predictions hold, the 2027 COLA could again be 2.8%. And some predictions are even smaller.
This offers little breathing room for seniors. It also means now may be the right time to take the necessary steps to protect your budget before officials finalize the next adjustment.
Review Your Medicare and Supplemental Coverage
Medicare premium and deductible increases can take up more than 25% of Social Security’s COLA, according to the Center for Retirement Research at Boston College. Between 2025 and 2026, the Part B premium increased from $185 to $202.90 per month — a 10% increase in a single year.
Make sure to review and update your Medicare and supplemental coverage each year during the open enrollment period, which runs from Oct. 15 to Dec. 7, according to Medicare.gov.
Trim Costs
Even saving a few dollars here and there over a month can add up to a lot over the course of a year. Review recurring charges such as streaming services, memberships, subscriptions and automatic deliveries. Cancel what you no longer use and downgrade plans where possible.
Next, look at variable expenses. Cook more meals at home and switch to store brands to reduce monthly costs. You can also comparison shop and look for coupons, senior discounts or cash-back programs.
Build an Emergency Fund
Start putting extra money into a high-yield savings account to build an emergency fund for unexpected expenses or to supplement your monthly income. Most experts recommend putting away at least three to six months’ worth of expenses.
Use Those Senior Discounts
Look for and take advantage of senior discounts wherever you can. Sign up for an AARP membership and always ask at checkout. You can potentially save money on travel, auto insurance, gym memberships, dining out, entertainment, shopping, utilities and more.
According to Caring.com, many senior discounts begin at age 55, though some programs set the threshold higher at 60 or 65. In certain cases, discounts may start as early as age 50.
Increase Income
Increasing income may not always be possible, but it can also help protect your budget if you rely on a fixed or limited income.
The SSA reported that for 2026, retirees can earn up to $24,480 per year under full retirement age without benefit cuts. This increases to $65,160 in the year a retiree reaches full retirement age.
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