AARP’s nearly $78,000 figure is a modeled cumulative difference—not a cut already made to anyone’s Social Security check. In one example, the AARP Public Policy Institute estimates that a retiree who began collecting the average retired-worker benefit at age 65 in 1998 and lived to age 93 in 2026 would receive $77,900 less in total under a proposed flat-rate cost-of-living adjustment (COLA) than under the current percentage-based formula. The total is stated in 2026 inflation-adjusted dollars. The proposal is not described in the reviewed sources as current policy.
What the nearly $78,000 estimate means
The $77,900 estimate comes from an AARP Public Policy Institute model of one hypothetical worker. The example assumes the worker started receiving the average retired-worker benefit at age 65 in 1998 and lived through age 93 in 2026. AARP compares the modeled total benefits under the existing percentage-based COLA with the total under a proposed flat-rate COLA. The $77,900 difference is cumulative and adjusted to 2026 dollars; it is not a prediction for every retiree or a one-time reduction to a monthly check. AARP Public Policy Institute’s analysis details the assumptions and estimates.
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The model also projects different annual benefits at age 93 in 2026: $22,600 under the current COLA path and $18,000 under the flat-rate path. That is a $4,600 annual difference, or 20%, for the example. These are modeled amounts for the same hypothetical worker, not personal benefit forecasts.
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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →How the current COLA works, according to AARP
AARP describes the current Social Security COLA as a percentage increase based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter compared with the same period a year earlier. The Social Security Administration computes the adjustment in October, and the increase is applied to monthly benefits the following January. AARP says the COLA has averaged 3.7% since 1975 and was 2.8% for benefits payable in January 2026. These mechanics and figures are attributed here to AARP’s analysis; they are not independently verified SSA statistics.
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What the proposed flat-rate COLA would change
Under the proposal AARP analyzes, the COLA percentage would still be used, but it would be applied to a reference benefit set at the 20th percentile of the retired-worker benefit distribution. That calculation produces a common dollar increase for beneficiaries rather than applying the percentage to each person’s own benefit. AARP estimates that 80% of beneficiaries would get a smaller annual adjustment than under the current formula.
The difference is easiest to see in AARP’s 2026 illustration:
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| Measure | Current percentage-based COLA | Proposed flat-rate COLA |
|---|---|---|
| Basis for the increase | Each beneficiary’s own benefit | AARP’s 20th-percentile reference benefit |
| 2025 monthly amount used in AARP’s illustration | $2,071 average retired-worker benefit | $1,223 20th-percentile retired-worker benefit |
| Estimated monthly increase for the average retired-worker benefit with the 2.8% 2026 COLA | $57.90 | $34.20, rounded down to the nearest dime |
| Difference over 12 months in AARP’s example | $285 less under the flat-rate calculation | |
These values are AARP Public Policy Institute calculations, not SSA-published benefit-distribution figures. AARP says it used SSA Statistical Supplement data for its benefit-distribution analysis. The annual difference shown is for this average-benefit illustration; it is not the same as the $77,900 cumulative estimate for the hypothetical worker across decades.
Why the modeled gap grows over time
With the current formula, a percentage increase is applied to each person’s current benefit. In the proposal, the same COLA percentage is applied to the reference amount, yielding the same dollar increase for everyone. For someone whose benefit is above that reference amount, the proposed dollar increase is generally smaller than the increase under the current formula. Repeated over many years, smaller increases can compound into a larger difference in annual benefits and cumulative payments.
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The modeled outcome therefore depends on both a person’s benefit relative to the reference amount and how long they receive benefits under the formula. AARP’s $77,900 example assumes a particular starting age, benefit level, start year, and lifespan; changing those inputs changes the result.
Other examples in AARP’s analysis
AARP also models two cases to illustrate how the proposed formula could affect people with different benefit histories. These are examples generated by AARP’s analysis, not forecasts for specific individuals.
- Woman retiring at 65 in 1998: For a woman receiving the average retired-worker benefit awarded to women that year, AARP estimates an annual benefit at age 93 in 2026 of $18,100 under the current COLA and $15,800 under the flat-rate proposal. AARP says the latter is just below the $15,960 single-person poverty line used in its analysis.
- Man becoming disabled at 36 in 1998: For a man receiving the average disabled-worker benefit awarded to men that year, AARP estimates an annual benefit at age 64 in 2026 of $17,000 under the current COLA and $15,200 under the flat-rate approach.
AARP’s analysis also says 20% of adults age 65 and older rely on Social Security for at least 90% of their income, and nearly 60% of adults age 75 and older have no retirement savings. These are figures reported in AARP’s analysis, not independently verified SSA statistics.
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No change is established by the reviewed sources. They describe a proposal, not an implemented formula. The exact-title FinanceBuzz article, updated October 9, 2026, says Congress has not approved the flat-dollar approach; that article’s details are based on its search-result information because the page itself was unavailable. AARP’s analysis describes the Committee for a Responsible Federal Budget as having recently elevated the proposal and argues against it. The available sources do not establish a complete legislative history or any later action, so they do not support a prediction about whether the proposal will pass.
What to take from the estimate
The $77,900 figure is useful as an illustration of how repeated differences in annual adjustments could add up under the proposal AARP modeled. It should not be read as the amount any particular person will lose. The proposal’s effect would vary with benefit size and the length of time someone receives benefits, and the analysis does not show that the change is in force.
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