If you get help with food or rent, your $75 raise may end up closer to $30.
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The Dalai Lama walks into a pizza shop and says...
Can you make me one with everything?
The ones who need it most keep the least
Here’s something that bugs me. The people who need the most help are the ones who keep the least of their raise. Because they need the help.
Picture someone on a fixed income who gets a little help with groceries and lives in a building where HUD helps with the rent. Prices went up on them like everyone else. In January their Social Security check goes up. Then the help goes down.
That’s why I wanted to pass this along.
You may have seen Fox Business report that Social Security is going up 3.6% for 2027. Social Security says the average retirement check goes up about $75 a month, starting in January. People on SSI see it on December 31.
That’s real. But it’s not the whole story.
So how much of that $75 do they actually keep?
SNAP counts Social Security as income and lowers the food benefit by 30 cents for every extra dollar of countable income. Because of how the housing-cost deduction works, it can take a bit more. HUD-assisted rent is built on 30 percent of adjusted income, so when the rent is recalculated, roughly another $22 a month goes there.
Run that on the average $75 and the person getting both kinds of help may keep around $30 of it. Sometimes less. The person getting no help at all keeps every dollar.
And SNAP already adjusted its own numbers on October 1. So the January raise only shows up on one side of their math, the side that says they have more income.
Help with the Medicare premium works differently, with income limits and its own rules for counting the raise. I walked through every program in this post to go deeper.
Nobody’s cheating anybody here. It’s how those programs count income. But nobody puts that part in the headline.
Here’s the one thing I’d do. When your raise letter comes, hold onto it. It shows up online in late November if you have a my Social Security account, or by mail in December. Some programs will ask you for it, and the ones that help you should each send their own letter with your new amount. If one program’s letter takes back more than half of your raise, I’d call and ask them to show you the math.
Anyway, I wanted you to hear it from me before the letters show up.
When your check goes up, do you actually notice it, or does it get eaten before you see it? Share it in the comments so we can all learn from it. I read every comment.
If your raise gets eaten, that isn’t you doing something wrong. It’s the rules. Knowing them before January means the letters won’t knock you over. I’ll see you tomorrow.
— Steve
Also on the site since yesterday: budgets suck, so watch what’s left at the end of the month, look broke for a year so you’re not broke for 10 years, why another loan won’t fix your credit card debt, Damon and I on the math to run before you start gig work, and before you prepay your heating oil dealer, read the contract.
A longer video from me: Being Retired and Lonely Can Cost You Dearly. It’s about the phone call asking for money after the job is gone, how to keep helping family without putting your own future in trouble, and why a family safe word beats a cloned voice.
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This is what I’m telling friends like you over coffee. But remember, you do you.