Key Points
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Social Security benefits get a 3.6% COLA in the new year.
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While that raise is generous, it may not be enough for some seniors.
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Now’s the time to make a plan so you can thrive come January.
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When the Social Security Administration announced earlier this month that benefits will get a 3.6% cost-of-living adjustment, or COLA, in 2027, many people were no doubt relieved. But if you can’t shake the nagging thought that a 3.6% COLA may not be enough come January, you’re probably in good company there, too.
The reality is that if Social Security is your primary source of retirement income, even a fairly large COLA may not help your finances so much on a broad level. If that’s the case, now’s the time to figure out a plan to improve your financial situation. And here are three things you can do immediately to that end.
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1. Do a spending audit and aim to trim expenses
If you’re mostly living on Social Security, you may not be spending frivolously. And you might also be convinced that you’ve truly done your best to keep your costs down.
Still, it pays to do a spending audit to see where your money has actually gone over the past few months. There may be a few hidden spots where you’re spending extra without realizing it, like the streaming service you said you’d only upgrade for a month but are still paying a higher price for.
When money is tight, even small spending changes can make a big difference. So it pays to take a close look at your bills in case a cost-cutting opportunity arises.
2. Look into a part-time job
Social Security recipients may earn income from a job while receiving benefits. And once you reach full retirement age, you can earn any amount of money without having benefits withheld.
If you’ve been having financial difficulties, working part-time could improve your situation tremendously. And thanks to the gig economy, that work doesn’t necessarily have to be performed on a preset schedule. You could try finding a job you can do at your convenience, like driving for a rideshare company or house sitting.
3. Consider relocation
The Social Security check you’re eligible for doesn’t hinge on your geographic location. In other words, whether you live in Maine, Delaware, or Arizona, you’re entitled to the same monthly benefit.
But some parts of the U.S. are far more affordable than others. If you’re looking to stretch your benefits, you may want to consider relocating if you can move affordably and have enough of a support system in a lower-cost area.
A 3.6% COLA might seem like something to celebrate. But if you’re concerned that it will fall short, that’s understandable. The good news is that you don’t have to just sit back and wait for that COLA to improve your finances. These moves could get you to a better place so that your COLA acts like more of a bonus than anything else.
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