Overview
- The analysis models a flat dollar cost‑of‑living adjustment (COLA) set at low‑percentile benefit levels and finds a 20th‑percentile flat COLA would close about 50% of Social Security’s 75‑year funding gap while a 30th‑percentile setting would close about 40%.
- Under the 20th‑percentile scenario the main trust funds’ projected insolvency is delayed by roughly two years but the change would not by itself prevent an eventual shortfall without additional reforms or revenue increases.
- Distributional effects are progressive: lower‑income retirees would see relatively preserved or higher benefits while higher‑lifetime earners would experience much slower benefit growth, with the bottom quintile gaining and the top quintile seeing the largest relative cuts over time.
- Near‑term beneficiary outcomes will depend on July–September CPI‑W readings that set the 2027 COLA and on Medicare Part B premium decisions, because premiums are deducted from checks and can erase nominal COLA gains.
- CRFB leaders note that adopting a flat‑rate COLA earlier would have produced far larger solvency gains, and they say pairing this approach with other measures — for example new revenue or payroll tax changes — would be needed to secure long‑term solvency.