Retirees are getting a 3.6% raise in Social Security. People staying in their jobs are getting only 3.4%.
Social Security beneficiaries, including retirees, are getting a 3.6% raise in 2027. Recent wage growth for job stayers was less than that.
The Social Security Administration announced a 3.6% cost-of-living adjustment for retirees in 2027, marking an increase over the 3.4% gain experienced by workers who remained in their jobs. Independent economist Aaron Terrazas noted that the inflation-adjusted raises for Social Security beneficiaries have outpaced the wage growth for job stayers in three of the past six years.
This disparity highlights the wage-price spiral that persisted in the 1970s, where incomes were indexed to inflation rather than labor costs for retirees. As baby boomers, who are currently in their peak retirement spending years, continue to influence consumer trends, the growing share of Americans in their retirement years could perpetuate a K-shaped economy, with older consumers driving outsize spending.
Terrazas warns that as boomers age out of the peak retirement spending years, spending may contract, particularly among those older than 80. In contrast, job-hopping, while potentially lucrative, may not be feasible for everyone due to limited job openings and volatile employment sectors. Despite low unemployment and job security for those currently employed, job seekers, especially in white-collar fields, face challenges securing new positions or maintaining their livelihoods.
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